Correlation Between Carnegie Clean and American Eagle
Can any of the company-specific risk be diversified away by investing in both Carnegie Clean 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 Carnegie Clean and American Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carnegie Clean Energy and American Eagle Outfitters, you can compare the effects of market volatilities on Carnegie Clean 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 Carnegie Clean with a short position of American Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carnegie Clean and American Eagle.
Diversification Opportunities for Carnegie Clean and American Eagle
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Carnegie and American is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Carnegie Clean Energy 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 Carnegie Clean 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 Carnegie Clean Energy 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 Carnegie Clean i.e., Carnegie Clean and American Eagle go up and down completely randomly.
Pair Corralation between Carnegie Clean and American Eagle
Assuming the 90 days trading horizon Carnegie Clean Energy is expected to generate 0.97 times more return on investment than American Eagle. However, Carnegie Clean Energy is 1.03 times less risky than American Eagle. It trades about 0.01 of its potential returns per unit of risk. American Eagle Outfitters is currently generating about -0.04 per unit of risk. If you would invest 2.00 in Carnegie Clean Energy on October 18, 2024 and sell it today you would earn a total of 0.00 from holding Carnegie Clean Energy or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carnegie Clean Energy vs. American Eagle Outfitters
Performance |
| Timeline |
| Carnegie Clean Energy |
| American Eagle Outfitters |
Carnegie Clean and American Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carnegie Clean and American Eagle
The main advantage of trading using opposite Carnegie Clean and American Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carnegie Clean 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.| Carnegie Clean vs. Information Services International Dentsu | Carnegie Clean vs. Pure Storage | Carnegie Clean vs. Hyrican Informationssysteme Aktiengesellschaft | Carnegie Clean vs. MTY Food Group |
| American Eagle vs. PLAYTIKA HOLDING DL 01 | American Eagle vs. Ultra Clean Holdings | American Eagle vs. Carnegie Clean Energy | American Eagle vs. Cleanaway Waste Management |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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