Correlation Between American Eagle and AGF Management
Can any of the company-specific risk be diversified away by investing in both American Eagle and AGF Management 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 AGF Management 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 AGF Management Limited, you can compare the effects of market volatilities on American Eagle and AGF Management 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 AGF Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Eagle and AGF Management.
Diversification Opportunities for American Eagle and AGF Management
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and AGF is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding American Eagle Outfitters and AGF Management Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGF Management 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 AGF Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGF Management has no effect on the direction of American Eagle i.e., American Eagle and AGF Management go up and down completely randomly.
Pair Corralation between American Eagle and AGF Management
Assuming the 90 days trading horizon American Eagle is expected to generate 1.79 times less return on investment than AGF Management. In addition to that, American Eagle is 1.39 times more volatile than AGF Management Limited. It trades about 0.03 of its total potential returns per unit of risk. AGF Management Limited is currently generating about 0.07 per unit of volatility. If you would invest 384.00 in AGF Management Limited on September 3, 2024 and sell it today you would earn a total of 346.00 from holding AGF Management Limited or generate 90.1% 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. AGF Management Limited
Performance |
| Timeline |
| American Eagle Outfitters |
| AGF Management |
American Eagle and AGF Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Eagle and AGF Management
The main advantage of trading using opposite American Eagle and AGF Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Eagle position performs unexpectedly, AGF Management 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 AGF Management will offset losses from the drop in AGF Management's long position.| American Eagle vs. Apple Inc | American Eagle vs. Apple Inc | American Eagle vs. Apple Inc | American Eagle vs. Apple Inc |
| AGF Management vs. American Eagle Outfitters | AGF Management vs. Citic Telecom International | AGF Management vs. Warner Music Group | AGF Management vs. Spirent Communications plc |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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