Correlation Between De Grey and American Eagle
Can any of the company-specific risk be diversified away by investing in both De Grey 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 De Grey and American Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between De Grey Mining and American Eagle Outfitters, you can compare the effects of market volatilities on De Grey 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 De Grey with a short position of American Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Grey and American Eagle.
Diversification Opportunities for De Grey and American Eagle
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DGD and American is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding De Grey Mining 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 De Grey 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 De Grey Mining 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 De Grey i.e., De Grey and American Eagle go up and down completely randomly.
Pair Corralation between De Grey and American Eagle
Assuming the 90 days trading horizon De Grey Mining is expected to generate 0.85 times more return on investment than American Eagle. However, De Grey Mining is 1.18 times less risky than American Eagle. It trades about 0.25 of its potential returns per unit of risk. American Eagle Outfitters is currently generating about -0.05 per unit of risk. If you would invest 104.00 in De Grey Mining on November 2, 2024 and sell it today you would earn a total of 10.00 from holding De Grey Mining or generate 9.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
De Grey Mining vs. American Eagle Outfitters
Performance |
| Timeline |
| De Grey Mining |
| American Eagle Outfitters |
De Grey and American Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with De Grey and American Eagle
The main advantage of trading using opposite De Grey and American Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Grey 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.| De Grey vs. PURE FOODS TASMANIA | De Grey vs. Molson Coors Beverage | De Grey vs. Eidesvik Offshore ASA | De Grey vs. Playtech plc |
| American Eagle vs. Autohome ADR | American Eagle vs. HOME DEPOT | American Eagle vs. UMC Electronics Co | American Eagle vs. STMICROELECTRONICS |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |