Correlation Between American Eagle and MINCO SILVER
Can any of the company-specific risk be diversified away by investing in both American Eagle and MINCO SILVER 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 MINCO SILVER 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 MINCO SILVER, you can compare the effects of market volatilities on American Eagle and MINCO SILVER 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 MINCO SILVER. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Eagle and MINCO SILVER.
Diversification Opportunities for American Eagle and MINCO SILVER
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and MINCO is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding American Eagle Outfitters and MINCO SILVER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MINCO SILVER 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 MINCO SILVER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MINCO SILVER has no effect on the direction of American Eagle i.e., American Eagle and MINCO SILVER go up and down completely randomly.
Pair Corralation between American Eagle and MINCO SILVER
Assuming the 90 days trading horizon American Eagle Outfitters is expected to under-perform the MINCO SILVER. But the stock apears to be less risky and, when comparing its historical volatility, American Eagle Outfitters is 1.74 times less risky than MINCO SILVER. The stock trades about -0.03 of its potential returns per unit of risk. The MINCO SILVER is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 16.00 in MINCO SILVER on August 29, 2024 and sell it today you would lose (3.00) from holding MINCO SILVER or give up 18.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Eagle Outfitters vs. MINCO SILVER
Performance |
| Timeline |
| American Eagle Outfitters |
| MINCO SILVER |
American Eagle and MINCO SILVER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Eagle and MINCO SILVER
The main advantage of trading using opposite American Eagle and MINCO SILVER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Eagle position performs unexpectedly, MINCO SILVER 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 MINCO SILVER will offset losses from the drop in MINCO SILVER's long position.| American Eagle vs. Apple Inc | American Eagle vs. Apple Inc | American Eagle vs. Apple Inc | American Eagle vs. Apple Inc |
| MINCO SILVER vs. Apple Inc | MINCO SILVER vs. Apple Inc | MINCO SILVER vs. Superior Plus Corp | MINCO SILVER vs. SIVERS SEMICONDUCTORS AB |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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