Correlation Between American Eagle and ANTA SPORTS
Can any of the company-specific risk be diversified away by investing in both American Eagle and ANTA SPORTS 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 ANTA SPORTS 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 ANTA SPORTS PRODUCT, you can compare the effects of market volatilities on American Eagle and ANTA SPORTS 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 ANTA SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Eagle and ANTA SPORTS.
Diversification Opportunities for American Eagle and ANTA SPORTS
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and ANTA is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding American Eagle Outfitters and ANTA SPORTS PRODUCT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANTA SPORTS PRODUCT 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 ANTA SPORTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANTA SPORTS PRODUCT has no effect on the direction of American Eagle i.e., American Eagle and ANTA SPORTS go up and down completely randomly.
Pair Corralation between American Eagle and ANTA SPORTS
Assuming the 90 days trading horizon American Eagle Outfitters is expected to generate 0.92 times more return on investment than ANTA SPORTS. However, American Eagle Outfitters is 1.09 times less risky than ANTA SPORTS. It trades about -0.04 of its potential returns per unit of risk. ANTA SPORTS PRODUCT is currently generating about -0.13 per unit of risk. If you would invest 1,790 in American Eagle Outfitters on September 2, 2024 and sell it today you would lose (40.00) from holding American Eagle Outfitters or give up 2.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Eagle Outfitters vs. ANTA SPORTS PRODUCT
Performance |
| Timeline |
| American Eagle Outfitters |
| ANTA SPORTS PRODUCT |
American Eagle and ANTA SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Eagle and ANTA SPORTS
The main advantage of trading using opposite American Eagle and ANTA SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Eagle position performs unexpectedly, ANTA SPORTS 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 ANTA SPORTS will offset losses from the drop in ANTA SPORTS's long position.| American Eagle vs. Apple Inc | American Eagle vs. Apple Inc | American Eagle vs. Apple Inc | American Eagle vs. Apple Inc |
| ANTA SPORTS vs. SIVERS SEMICONDUCTORS AB | ANTA SPORTS vs. Darden Restaurants | ANTA SPORTS vs. Reliance Steel Aluminum | ANTA SPORTS vs. Q2M Managementberatung AG |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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