Correlation Between Clearside Biomedical and American Eagle
Can any of the company-specific risk be diversified away by investing in both Clearside Biomedical 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 Clearside Biomedical and American Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearside Biomedical and American Eagle Outfitters, you can compare the effects of market volatilities on Clearside Biomedical 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 Clearside Biomedical with a short position of American Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearside Biomedical and American Eagle.
Diversification Opportunities for Clearside Biomedical and American Eagle
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Clearside and American is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Clearside Biomedical 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 Clearside Biomedical 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 Clearside Biomedical 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 Clearside Biomedical i.e., Clearside Biomedical and American Eagle go up and down completely randomly.
Pair Corralation between Clearside Biomedical and American Eagle
Assuming the 90 days trading horizon Clearside Biomedical is expected to generate 1.55 times more return on investment than American Eagle. However, Clearside Biomedical is 1.55 times more volatile than American Eagle Outfitters. It trades about 0.05 of its potential returns per unit of risk. American Eagle Outfitters is currently generating about -0.43 per unit of risk. If you would invest 91.00 in Clearside Biomedical on November 27, 2024 and sell it today you would earn a total of 2.00 from holding Clearside Biomedical or generate 2.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearside Biomedical vs. American Eagle Outfitters
Performance |
| Timeline |
| Clearside Biomedical |
| American Eagle Outfitters |
Clearside Biomedical and American Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearside Biomedical and American Eagle
The main advantage of trading using opposite Clearside Biomedical and American Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearside Biomedical 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.| Clearside Biomedical vs. TRAVEL LEISURE DL 01 | Clearside Biomedical vs. Ares Management Corp | Clearside Biomedical vs. AWILCO DRILLING PLC | Clearside Biomedical vs. Brockhaus Capital Management |
| American Eagle vs. Gaming and Leisure | American Eagle vs. PLAYWAY SA ZY 10 | American Eagle vs. BJs Restaurants | American Eagle vs. Air Transport Services |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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