Correlation Between AM EAGLE and Transportadora
Can any of the company-specific risk be diversified away by investing in both AM EAGLE and Transportadora 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 Transportadora 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 Transportadora de Gas, you can compare the effects of market volatilities on AM EAGLE and Transportadora 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 Transportadora. Check out your portfolio center. Please also check ongoing floating volatility patterns of AM EAGLE and Transportadora.
Diversification Opportunities for AM EAGLE and Transportadora
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AFG and Transportadora is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding AM EAGLE OUTFITTERS and Transportadora de Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transportadora de Gas 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 Transportadora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transportadora de Gas has no effect on the direction of AM EAGLE i.e., AM EAGLE and Transportadora go up and down completely randomly.
Pair Corralation between AM EAGLE and Transportadora
Assuming the 90 days trading horizon AM EAGLE OUTFITTERS is expected to under-perform the Transportadora. But the stock apears to be less risky and, when comparing its historical volatility, AM EAGLE OUTFITTERS is 1.6 times less risky than Transportadora. The stock trades about -0.02 of its potential returns per unit of risk. The Transportadora de Gas is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,770 in Transportadora de Gas on September 1, 2024 and sell it today you would earn a total of 1,090 from holding Transportadora de Gas or generate 61.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AM EAGLE OUTFITTERS vs. Transportadora de Gas
Performance |
| Timeline |
| AM EAGLE OUTFITTERS |
| Transportadora de Gas |
AM EAGLE and Transportadora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AM EAGLE and Transportadora
The main advantage of trading using opposite AM EAGLE and Transportadora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AM EAGLE position performs unexpectedly, Transportadora 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 Transportadora will offset losses from the drop in Transportadora's long position.| AM EAGLE vs. AVITA Medical | AM EAGLE vs. EAT WELL INVESTMENT | AM EAGLE vs. Diamyd Medical AB | AM EAGLE vs. CompuGroup Medical SE |
| Transportadora vs. AIR PRODCHEMICALS | Transportadora vs. Bumrungrad Hospital Public | Transportadora vs. National Health Investors | Transportadora vs. Cardinal Health |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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