Correlation Between American Eagle and Uber Technologies
Can any of the company-specific risk be diversified away by investing in both American Eagle and Uber Technologies 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 Uber Technologies 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 Uber Technologies, you can compare the effects of market volatilities on American Eagle and Uber Technologies 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 Uber Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Eagle and Uber Technologies.
Diversification Opportunities for American Eagle and Uber Technologies
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and Uber is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding American Eagle Outfitters and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies 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 Uber Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uber Technologies has no effect on the direction of American Eagle i.e., American Eagle and Uber Technologies go up and down completely randomly.
Pair Corralation between American Eagle and Uber Technologies
Assuming the 90 days trading horizon American Eagle is expected to generate 4.81 times less return on investment than Uber Technologies. In addition to that, American Eagle is 1.17 times more volatile than Uber Technologies. It trades about 0.01 of its total potential returns per unit of risk. Uber Technologies is currently generating about 0.08 per unit of volatility. If you would invest 3,012 in Uber Technologies on December 4, 2024 and sell it today you would earn a total of 3,858 from holding Uber Technologies or generate 128.09% 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. Uber Technologies
Performance |
| Timeline |
| American Eagle Outfitters |
| Uber Technologies |
American Eagle and Uber Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Eagle and Uber Technologies
The main advantage of trading using opposite American Eagle and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Eagle position performs unexpectedly, Uber Technologies 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 Uber Technologies will offset losses from the drop in Uber Technologies' long position.| American Eagle vs. Nufarm Limited | American Eagle vs. Collins Foods Limited | American Eagle vs. DaChan Food Limited | American Eagle vs. Axfood AB |
| Uber Technologies vs. CNVISION MEDIA | Uber Technologies vs. CompuGroup Medical SE | Uber Technologies vs. G III APPAREL GROUP | Uber Technologies vs. MeVis Medical Solutions |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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