Correlation Between DISTRICT METALS and American Eagle
Can any of the company-specific risk be diversified away by investing in both DISTRICT METALS 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 DISTRICT METALS and American Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DISTRICT METALS and American Eagle Outfitters, you can compare the effects of market volatilities on DISTRICT METALS 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 DISTRICT METALS with a short position of American Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of DISTRICT METALS and American Eagle.
Diversification Opportunities for DISTRICT METALS and American Eagle
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between DISTRICT and American is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding DISTRICT METALS 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 DISTRICT METALS 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 DISTRICT METALS 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 DISTRICT METALS i.e., DISTRICT METALS and American Eagle go up and down completely randomly.
Pair Corralation between DISTRICT METALS and American Eagle
Assuming the 90 days trading horizon DISTRICT METALS is expected to generate 1.4 times more return on investment than American Eagle. However, DISTRICT METALS is 1.4 times more volatile than American Eagle Outfitters. It trades about -0.03 of its potential returns per unit of risk. American Eagle Outfitters is currently generating about -0.08 per unit of risk. If you would invest 26.00 in DISTRICT METALS on November 3, 2024 and sell it today you would lose (1.00) from holding DISTRICT METALS or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DISTRICT METALS vs. American Eagle Outfitters
Performance |
| Timeline |
| DISTRICT METALS |
| American Eagle Outfitters |
DISTRICT METALS and American Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DISTRICT METALS and American Eagle
The main advantage of trading using opposite DISTRICT METALS and American Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DISTRICT METALS 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.| DISTRICT METALS vs. CarsalesCom | DISTRICT METALS vs. Nippon Steel | DISTRICT METALS vs. The Japan Steel | DISTRICT METALS vs. Guangdong Investment Limited |
| American Eagle vs. GALENA MINING LTD | American Eagle vs. ARDAGH METAL PACDL 0001 | American Eagle vs. SLR Investment Corp | American Eagle vs. MAGNUM MINING EXP |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |