Correlation Between AM EAGLE and T.J. Maxx
Can any of the company-specific risk be diversified away by investing in both AM EAGLE and T.J. Maxx 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 T.J. Maxx 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 The TJX Companies, you can compare the effects of market volatilities on AM EAGLE and T.J. Maxx 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 T.J. Maxx. Check out your portfolio center. Please also check ongoing floating volatility patterns of AM EAGLE and T.J. Maxx.
Diversification Opportunities for AM EAGLE and T.J. Maxx
Very good diversification
The 3 months correlation between AFG and T.J. is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding AM EAGLE OUTFITTERS and The TJX Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TJX Companies 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 T.J. Maxx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TJX Companies has no effect on the direction of AM EAGLE i.e., AM EAGLE and T.J. Maxx go up and down completely randomly.
Pair Corralation between AM EAGLE and T.J. Maxx
Assuming the 90 days trading horizon AM EAGLE is expected to generate 7.85 times less return on investment than T.J. Maxx. In addition to that, AM EAGLE is 1.7 times more volatile than The TJX Companies. It trades about 0.03 of its total potential returns per unit of risk. The TJX Companies is currently generating about 0.42 per unit of volatility. If you would invest 10,322 in The TJX Companies on September 2, 2024 and sell it today you would earn a total of 1,628 from holding The TJX Companies or generate 15.77% 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. The TJX Companies
Performance |
| Timeline |
| AM EAGLE OUTFITTERS |
| TJX Companies |
AM EAGLE and T.J. Maxx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AM EAGLE and T.J. Maxx
The main advantage of trading using opposite AM EAGLE and T.J. Maxx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AM EAGLE position performs unexpectedly, T.J. Maxx 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 T.J. Maxx will offset losses from the drop in T.J. Maxx'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 |
| T.J. Maxx vs. Superior Plus Corp | T.J. Maxx vs. Origin Agritech | T.J. Maxx vs. Identiv | T.J. Maxx vs. INTUITIVE SURGICAL |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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