Correlation Between CNVISION MEDIA and American Eagle
Can any of the company-specific risk be diversified away by investing in both CNVISION MEDIA and American Eagle 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 CNVISION MEDIA and American Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNVISION MEDIA and American Eagle Outfitters, you can compare the effects of market volatilities on CNVISION MEDIA and American Eagle 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 CNVISION MEDIA with a short position of American Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNVISION MEDIA and American Eagle.
Diversification Opportunities for CNVISION MEDIA and American Eagle
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between CNVISION and American is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding CNVISION MEDIA and American Eagle Outfitters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Eagle Outfitters and CNVISION MEDIA 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 CNVISION MEDIA are associated (or correlated) with American Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Eagle Outfitters has no effect on the direction of CNVISION MEDIA i.e., CNVISION MEDIA and American Eagle go up and down completely randomly.
Pair Corralation between CNVISION MEDIA and American Eagle
Assuming the 90 days trading horizon CNVISION MEDIA is expected to generate 1.2 times more return on investment than American Eagle. However, CNVISION MEDIA is 1.2 times more volatile than American Eagle Outfitters. It trades about 0.0 of its potential returns per unit of risk. American Eagle Outfitters is currently generating about -0.03 per unit of risk. If you would invest 5.20 in CNVISION MEDIA on August 29, 2024 and sell it today you would lose (0.35) from holding CNVISION MEDIA or give up 6.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CNVISION MEDIA vs. American Eagle Outfitters
Performance |
| Timeline |
| CNVISION MEDIA |
| American Eagle Outfitters |
CNVISION MEDIA and American Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNVISION MEDIA and American Eagle
The main advantage of trading using opposite CNVISION MEDIA and American Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNVISION MEDIA position performs unexpectedly, American Eagle 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 American Eagle will offset losses from the drop in American Eagle's long position.| CNVISION MEDIA vs. Apple Inc | CNVISION MEDIA vs. Apple Inc | CNVISION MEDIA vs. Superior Plus Corp | CNVISION MEDIA vs. SIVERS SEMICONDUCTORS AB |
| American Eagle vs. Apple Inc | American Eagle vs. Apple Inc | American Eagle vs. Apple Inc | American Eagle vs. Apple Inc |
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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