Correlation Between American Eagle and Astral Foods
Can any of the company-specific risk be diversified away by investing in both American Eagle and Astral Foods 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 Astral Foods 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 Astral Foods Limited, you can compare the effects of market volatilities on American Eagle and Astral Foods 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 Astral Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Eagle and Astral Foods.
Diversification Opportunities for American Eagle and Astral Foods
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between American and Astral is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding American Eagle Outfitters and Astral Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astral Foods Limited 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 Astral Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astral Foods Limited has no effect on the direction of American Eagle i.e., American Eagle and Astral Foods go up and down completely randomly.
Pair Corralation between American Eagle and Astral Foods
Assuming the 90 days trading horizon American Eagle is expected to generate 3.9 times less return on investment than Astral Foods. But when comparing it to its historical volatility, American Eagle Outfitters is 3.43 times less risky than Astral Foods. It trades about 0.03 of its potential returns per unit of risk. Astral Foods Limited is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 905.00 in Astral Foods Limited on September 1, 2024 and sell it today you would earn a total of 45.00 from holding Astral Foods Limited or generate 4.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Eagle Outfitters vs. Astral Foods Limited
Performance |
| Timeline |
| American Eagle Outfitters |
| Astral Foods Limited |
American Eagle and Astral Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Eagle and Astral Foods
The main advantage of trading using opposite American Eagle and Astral Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Eagle position performs unexpectedly, Astral Foods 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 Astral Foods will offset losses from the drop in Astral Foods' long position.| American Eagle vs. LPKF Laser Electronics | American Eagle vs. AOI Electronics Co | American Eagle vs. CITY OFFICE REIT | American Eagle vs. ARROW ELECTRONICS |
| Astral Foods vs. EAT WELL INVESTMENT | Astral Foods vs. Apollo Investment Corp | Astral Foods vs. CHINA OIL AND | Astral Foods vs. New Residential Investment |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |