Correlation Between American Eagle and LANSON-BCC INH
Can any of the company-specific risk be diversified away by investing in both American Eagle and LANSON-BCC INH 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 LANSON-BCC INH 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 LANSON BCC INH EO, you can compare the effects of market volatilities on American Eagle and LANSON-BCC INH 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 LANSON-BCC INH. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Eagle and LANSON-BCC INH.
Diversification Opportunities for American Eagle and LANSON-BCC INH
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and LANSON-BCC is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding American Eagle Outfitters and LANSON BCC INH EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LANSON BCC INH 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 LANSON-BCC INH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LANSON BCC INH has no effect on the direction of American Eagle i.e., American Eagle and LANSON-BCC INH go up and down completely randomly.
Pair Corralation between American Eagle and LANSON-BCC INH
Assuming the 90 days trading horizon American Eagle Outfitters is expected to generate 2.08 times more return on investment than LANSON-BCC INH. However, American Eagle is 2.08 times more volatile than LANSON BCC INH EO. It trades about -0.07 of its potential returns per unit of risk. LANSON BCC INH EO is currently generating about -0.21 per unit of risk. If you would invest 1,597 in American Eagle Outfitters on October 23, 2024 and sell it today you would lose (47.00) from holding American Eagle Outfitters or give up 2.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Eagle Outfitters vs. LANSON BCC INH EO
Performance |
| Timeline |
| American Eagle Outfitters |
| LANSON BCC INH |
American Eagle and LANSON-BCC INH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Eagle and LANSON-BCC INH
The main advantage of trading using opposite American Eagle and LANSON-BCC INH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Eagle position performs unexpectedly, LANSON-BCC INH 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 LANSON-BCC INH will offset losses from the drop in LANSON-BCC INH's long position.| American Eagle vs. Take Two Interactive Software | American Eagle vs. OFFICE DEPOT | American Eagle vs. AUTOHOME INC A | American Eagle vs. Easy Software AG |
| LANSON-BCC INH vs. Altia Oyj | LANSON-BCC INH vs. VIRGIN WINES UK | LANSON-BCC INH vs. Superior Plus Corp | LANSON-BCC INH vs. Origin Agritech |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |