Correlation Between American Eagle and PEH WERTPAPIER
Can any of the company-specific risk be diversified away by investing in both American Eagle and PEH WERTPAPIER 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 PEH WERTPAPIER 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 PEH WERTPAPIER, you can compare the effects of market volatilities on American Eagle and PEH WERTPAPIER 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 PEH WERTPAPIER. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Eagle and PEH WERTPAPIER.
Diversification Opportunities for American Eagle and PEH WERTPAPIER
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between American and PEH is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding American Eagle Outfitters and PEH WERTPAPIER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEH WERTPAPIER 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 PEH WERTPAPIER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PEH WERTPAPIER has no effect on the direction of American Eagle i.e., American Eagle and PEH WERTPAPIER go up and down completely randomly.
Pair Corralation between American Eagle and PEH WERTPAPIER
Assuming the 90 days trading horizon American Eagle Outfitters is expected to generate 2.13 times more return on investment than PEH WERTPAPIER. However, American Eagle is 2.13 times more volatile than PEH WERTPAPIER. It trades about 0.05 of its potential returns per unit of risk. PEH WERTPAPIER is currently generating about 0.04 per unit of risk. If you would invest 1,150 in American Eagle Outfitters on September 12, 2024 and sell it today you would earn a total of 550.00 from holding American Eagle Outfitters or generate 47.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.72% |
| Values | Daily Returns |
American Eagle Outfitters vs. PEH WERTPAPIER
Performance |
| Timeline |
| American Eagle Outfitters |
| PEH WERTPAPIER |
American Eagle and PEH WERTPAPIER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Eagle and PEH WERTPAPIER
The main advantage of trading using opposite American Eagle and PEH WERTPAPIER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Eagle position performs unexpectedly, PEH WERTPAPIER 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 PEH WERTPAPIER will offset losses from the drop in PEH WERTPAPIER's long position.| American Eagle vs. Apple Inc | American Eagle vs. Apple Inc | American Eagle vs. Apple Inc | American Eagle vs. Apple Inc |
| PEH WERTPAPIER vs. Guidewire Software | PEH WERTPAPIER vs. ASURE SOFTWARE | PEH WERTPAPIER vs. Alfa Financial Software | PEH WERTPAPIER vs. SCANSOURCE |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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