Correlation Between American Eagle and Minnova Corp
Can any of the company-specific risk be diversified away by investing in both American Eagle and Minnova Corp 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 Minnova Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Eagle Gold and Minnova Corp, you can compare the effects of market volatilities on American Eagle and Minnova Corp 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 Minnova Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Eagle and Minnova Corp.
Diversification Opportunities for American Eagle and Minnova Corp
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and Minnova is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding American Eagle Gold and Minnova Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minnova Corp 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 Gold are associated (or correlated) with Minnova Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minnova Corp has no effect on the direction of American Eagle i.e., American Eagle and Minnova Corp go up and down completely randomly.
Pair Corralation between American Eagle and Minnova Corp
Assuming the 90 days horizon American Eagle is expected to generate 30.85 times less return on investment than Minnova Corp. But when comparing it to its historical volatility, American Eagle Gold is 35.55 times less risky than Minnova Corp. It trades about 0.25 of its potential returns per unit of risk. Minnova Corp is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Minnova Corp on September 3, 2024 and sell it today you would earn a total of 0.25 from holding Minnova Corp or generate 2500.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
American Eagle Gold vs. Minnova Corp
Performance |
| Timeline |
| American Eagle Gold |
| Minnova Corp |
American Eagle and Minnova Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Eagle and Minnova Corp
The main advantage of trading using opposite American Eagle and Minnova Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Eagle position performs unexpectedly, Minnova Corp 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 Minnova Corp will offset losses from the drop in Minnova Corp's long position.| American Eagle vs. Minnova Corp | American Eagle vs. Blue Star Gold | American Eagle vs. Advance Gold Corp | American Eagle vs. Argo Gold |
| Minnova Corp vs. Harmony Gold Mining | Minnova Corp vs. SPACE | Minnova Corp vs. T Rowe Price | Minnova Corp vs. Ampleforth |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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