Correlation Between American Eagle and FORMPIPE SOFTWARE
Can any of the company-specific risk be diversified away by investing in both American Eagle and FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE AB, you can compare the effects of market volatilities on American Eagle and FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Eagle and FORMPIPE SOFTWARE.
Diversification Opportunities for American Eagle and FORMPIPE SOFTWARE
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and FORMPIPE is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding American Eagle Outfitters and FORMPIPE SOFTWARE AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FORMPIPE SOFTWARE has no effect on the direction of American Eagle i.e., American Eagle and FORMPIPE SOFTWARE go up and down completely randomly.
Pair Corralation between American Eagle and FORMPIPE SOFTWARE
Assuming the 90 days trading horizon American Eagle is expected to generate 1.19 times less return on investment than FORMPIPE SOFTWARE. In addition to that, American Eagle is 1.18 times more volatile than FORMPIPE SOFTWARE AB. It trades about 0.03 of its total potential returns per unit of risk. FORMPIPE SOFTWARE AB is currently generating about 0.04 per unit of volatility. If you would invest 149.00 in FORMPIPE SOFTWARE AB on September 3, 2024 and sell it today you would earn a total of 63.00 from holding FORMPIPE SOFTWARE AB or generate 42.28% 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. FORMPIPE SOFTWARE AB
Performance |
| Timeline |
| American Eagle Outfitters |
| FORMPIPE SOFTWARE |
American Eagle and FORMPIPE SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Eagle and FORMPIPE SOFTWARE
The main advantage of trading using opposite American Eagle and FORMPIPE SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Eagle position performs unexpectedly, FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE will offset losses from the drop in FORMPIPE SOFTWARE's long position.| American Eagle vs. Apple Inc | American Eagle vs. Apple Inc | American Eagle vs. Apple Inc | American Eagle vs. Apple Inc |
| FORMPIPE SOFTWARE vs. Computer And Technologies | FORMPIPE SOFTWARE vs. Ribbon Communications | FORMPIPE SOFTWARE vs. United Utilities Group | FORMPIPE SOFTWARE vs. COMBA TELECOM SYST |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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