Correlation Between American Eagle and FATFISH GROUP
Can any of the company-specific risk be diversified away by investing in both American Eagle and FATFISH GROUP 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 American Eagle and FATFISH GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Eagle Outfitters and FATFISH GROUP LTD, you can compare the effects of market volatilities on American Eagle and FATFISH GROUP 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 American Eagle with a short position of FATFISH GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Eagle and FATFISH GROUP.
Diversification Opportunities for American Eagle and FATFISH GROUP
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and FATFISH is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding American Eagle Outfitters and FATFISH GROUP LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FATFISH GROUP LTD and American 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 American Eagle Outfitters are associated (or correlated) with FATFISH GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FATFISH GROUP LTD has no effect on the direction of American Eagle i.e., American Eagle and FATFISH GROUP go up and down completely randomly.
Pair Corralation between American Eagle and FATFISH GROUP
Assuming the 90 days trading horizon American Eagle is expected to generate 5.83 times less return on investment than FATFISH GROUP. But when comparing it to its historical volatility, American Eagle Outfitters is 3.99 times less risky than FATFISH GROUP. It trades about 0.03 of its potential returns per unit of risk. FATFISH GROUP LTD is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.70 in FATFISH GROUP LTD on September 14, 2024 and sell it today you would lose (0.20) from holding FATFISH GROUP LTD or give up 28.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Eagle Outfitters vs. FATFISH GROUP LTD
Performance |
| Timeline |
| American Eagle Outfitters |
| FATFISH GROUP LTD |
American Eagle and FATFISH GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Eagle and FATFISH GROUP
The main advantage of trading using opposite American Eagle and FATFISH GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Eagle position performs unexpectedly, FATFISH GROUP 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 FATFISH GROUP will offset losses from the drop in FATFISH GROUP's long position.| American Eagle vs. Apple Inc | American Eagle vs. Apple Inc | American Eagle vs. Apple Inc | American Eagle vs. Apple Inc |
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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 Stocks Directory module to find actively traded stocks across global markets.
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