Correlation Between AM EAGLE and Siemens Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both AM EAGLE and Siemens Aktiengesellscha at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining AM EAGLE and Siemens Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AM EAGLE OUTFITTERS and Siemens Aktiengesellschaft, you can compare the effects of market volatilities on AM EAGLE and Siemens Aktiengesellscha and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in AM EAGLE with a short position of Siemens Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of AM EAGLE and Siemens Aktiengesellscha.
Diversification Opportunities for AM EAGLE and Siemens Aktiengesellscha
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AFG and Siemens is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding AM EAGLE OUTFITTERS and Siemens Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Aktiengesellscha and AM EAGLE is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on AM EAGLE OUTFITTERS are associated (or correlated) with Siemens Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siemens Aktiengesellscha has no effect on the direction of AM EAGLE i.e., AM EAGLE and Siemens Aktiengesellscha go up and down completely randomly.
Pair Corralation between AM EAGLE and Siemens Aktiengesellscha
Assuming the 90 days trading horizon AM EAGLE OUTFITTERS is expected to generate 1.78 times more return on investment than Siemens Aktiengesellscha. However, AM EAGLE is 1.78 times more volatile than Siemens Aktiengesellschaft. It trades about 0.03 of its potential returns per unit of risk. Siemens Aktiengesellschaft is currently generating about 0.05 per unit of risk. If you would invest 1,417 in AM EAGLE OUTFITTERS on September 2, 2024 and sell it today you would earn a total of 393.00 from holding AM EAGLE OUTFITTERS or generate 27.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AM EAGLE OUTFITTERS vs. Siemens Aktiengesellschaft
Performance |
| Timeline |
| AM EAGLE OUTFITTERS |
| Siemens Aktiengesellscha |
AM EAGLE and Siemens Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AM EAGLE and Siemens Aktiengesellscha
The main advantage of trading using opposite AM EAGLE and Siemens Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AM EAGLE position performs unexpectedly, Siemens Aktiengesellscha can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Siemens Aktiengesellscha will offset losses from the drop in Siemens Aktiengesellscha's long position.| AM EAGLE vs. SIVERS SEMICONDUCTORS AB | AM EAGLE vs. Darden Restaurants | AM EAGLE vs. Reliance Steel Aluminum | AM EAGLE vs. Q2M Managementberatung AG |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |