Correlation Between American Eagle and ELEMENT FLEET
Can any of the company-specific risk be diversified away by investing in both American Eagle and ELEMENT FLEET 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 ELEMENT FLEET 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 ELEMENT FLEET MGMT, you can compare the effects of market volatilities on American Eagle and ELEMENT FLEET 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 ELEMENT FLEET. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Eagle and ELEMENT FLEET.
Diversification Opportunities for American Eagle and ELEMENT FLEET
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and ELEMENT is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding American Eagle Outfitters and ELEMENT FLEET MGMT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELEMENT FLEET MGMT 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 ELEMENT FLEET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELEMENT FLEET MGMT has no effect on the direction of American Eagle i.e., American Eagle and ELEMENT FLEET go up and down completely randomly.
Pair Corralation between American Eagle and ELEMENT FLEET
Assuming the 90 days trading horizon American Eagle is expected to generate 1.27 times less return on investment than ELEMENT FLEET. In addition to that, American Eagle is 1.46 times more volatile than ELEMENT FLEET MGMT. It trades about 0.03 of its total potential returns per unit of risk. ELEMENT FLEET MGMT is currently generating about 0.06 per unit of volatility. If you would invest 1,175 in ELEMENT FLEET MGMT on September 14, 2024 and sell it today you would earn a total of 755.00 from holding ELEMENT FLEET MGMT or generate 64.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Eagle Outfitters vs. ELEMENT FLEET MGMT
Performance |
| Timeline |
| American Eagle Outfitters |
| ELEMENT FLEET MGMT |
American Eagle and ELEMENT FLEET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Eagle and ELEMENT FLEET
The main advantage of trading using opposite American Eagle and ELEMENT FLEET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Eagle position performs unexpectedly, ELEMENT FLEET 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 ELEMENT FLEET will offset losses from the drop in ELEMENT FLEET's long position.| American Eagle vs. Apple Inc | American Eagle vs. Apple Inc | American Eagle vs. Apple Inc | American Eagle vs. Apple Inc |
| ELEMENT FLEET vs. American Eagle Outfitters | ELEMENT FLEET vs. Jacquet Metal Service | ELEMENT FLEET vs. JAPAN TOBACCO UNSPADR12 | ELEMENT FLEET vs. Ultra Clean Holdings |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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