Correlation Between AM EAGLE and CarsalesCom
Can any of the company-specific risk be diversified away by investing in both AM EAGLE and CarsalesCom 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 CarsalesCom 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 CarsalesCom, you can compare the effects of market volatilities on AM EAGLE and CarsalesCom 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 CarsalesCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of AM EAGLE and CarsalesCom.
Diversification Opportunities for AM EAGLE and CarsalesCom
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AFG and CarsalesCom is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding AM EAGLE OUTFITTERS and CarsalesCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarsalesCom 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 CarsalesCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CarsalesCom has no effect on the direction of AM EAGLE i.e., AM EAGLE and CarsalesCom go up and down completely randomly.
Pair Corralation between AM EAGLE and CarsalesCom
Assuming the 90 days trading horizon AM EAGLE OUTFITTERS is expected to under-perform the CarsalesCom. In addition to that, AM EAGLE is 2.01 times more volatile than CarsalesCom. It trades about -0.11 of its total potential returns per unit of risk. CarsalesCom is currently generating about 0.39 per unit of volatility. If you would invest 2,240 in CarsalesCom on August 29, 2024 and sell it today you would earn a total of 260.00 from holding CarsalesCom or generate 11.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
AM EAGLE OUTFITTERS vs. CarsalesCom
Performance |
| Timeline |
| AM EAGLE OUTFITTERS |
| CarsalesCom |
AM EAGLE and CarsalesCom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AM EAGLE and CarsalesCom
The main advantage of trading using opposite AM EAGLE and CarsalesCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AM EAGLE position performs unexpectedly, CarsalesCom 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 CarsalesCom will offset losses from the drop in CarsalesCom's long position.| AM EAGLE vs. Apple Inc | AM EAGLE vs. Apple Inc | AM EAGLE vs. Superior Plus Corp | AM EAGLE vs. SIVERS SEMICONDUCTORS AB |
| CarsalesCom vs. AM EAGLE OUTFITTERS | CarsalesCom vs. RYU Apparel | CarsalesCom vs. Cal Maine Foods | CarsalesCom vs. SCIENCE IN SPORT |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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