Correlation Between American Eagle and GREENLIGHT CAP
Can any of the company-specific risk be diversified away by investing in both American Eagle and GREENLIGHT CAP 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 GREENLIGHT CAP 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 GREENLIGHT CAP RE, you can compare the effects of market volatilities on American Eagle and GREENLIGHT CAP 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 GREENLIGHT CAP. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Eagle and GREENLIGHT CAP.
Diversification Opportunities for American Eagle and GREENLIGHT CAP
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and GREENLIGHT is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding American Eagle Outfitters and GREENLIGHT CAP RE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GREENLIGHT CAP RE 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 GREENLIGHT CAP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GREENLIGHT CAP RE has no effect on the direction of American Eagle i.e., American Eagle and GREENLIGHT CAP go up and down completely randomly.
Pair Corralation between American Eagle and GREENLIGHT CAP
Assuming the 90 days trading horizon American Eagle Outfitters is expected to under-perform the GREENLIGHT CAP. In addition to that, American Eagle is 1.58 times more volatile than GREENLIGHT CAP RE. It trades about -0.03 of its total potential returns per unit of risk. GREENLIGHT CAP RE is currently generating about 0.06 per unit of volatility. If you would invest 1,150 in GREENLIGHT CAP RE on October 14, 2024 and sell it today you would earn a total of 200.00 from holding GREENLIGHT CAP RE or generate 17.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Eagle Outfitters vs. GREENLIGHT CAP RE
Performance |
| Timeline |
| American Eagle Outfitters |
| GREENLIGHT CAP RE |
American Eagle and GREENLIGHT CAP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Eagle and GREENLIGHT CAP
The main advantage of trading using opposite American Eagle and GREENLIGHT CAP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Eagle position performs unexpectedly, GREENLIGHT CAP 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 GREENLIGHT CAP will offset losses from the drop in GREENLIGHT CAP's long position.| American Eagle vs. CN MODERN DAIRY | American Eagle vs. Ebro Foods SA | American Eagle vs. FAST RETAIL ADR | American Eagle vs. PLANT VEDA FOODS |
| GREENLIGHT CAP vs. American Eagle Outfitters | GREENLIGHT CAP vs. AM EAGLE OUTFITTERS | GREENLIGHT CAP vs. Wayside Technology Group | GREENLIGHT CAP vs. Infrastrutture Wireless Italiane |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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