Correlation Between American Eagle and Joh Friedrich
Can any of the company-specific risk be diversified away by investing in both American Eagle and Joh Friedrich 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 Joh Friedrich 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 Joh Friedrich Behrens, you can compare the effects of market volatilities on American Eagle and Joh Friedrich 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 Joh Friedrich. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Eagle and Joh Friedrich.
Diversification Opportunities for American Eagle and Joh Friedrich
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Joh is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Eagle Outfitters and Joh Friedrich Behrens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Joh Friedrich Behrens 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 Joh Friedrich. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Joh Friedrich Behrens has no effect on the direction of American Eagle i.e., American Eagle and Joh Friedrich go up and down completely randomly.
Pair Corralation between American Eagle and Joh Friedrich
If you would invest 0.05 in Joh Friedrich Behrens on September 13, 2024 and sell it today you would earn a total of 0.00 from holding Joh Friedrich Behrens or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Eagle Outfitters vs. Joh Friedrich Behrens
Performance |
| Timeline |
| American Eagle Outfitters |
| Joh Friedrich Behrens |
American Eagle and Joh Friedrich Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Eagle and Joh Friedrich
The main advantage of trading using opposite American Eagle and Joh Friedrich positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Eagle position performs unexpectedly, Joh Friedrich 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 Joh Friedrich will offset losses from the drop in Joh Friedrich's long position.| American Eagle vs. Apple Inc | American Eagle vs. Apple Inc | American Eagle vs. Apple Inc | American Eagle vs. Apple Inc |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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