Correlation Between DONGJIANG ENVIRONMENTAL and American Eagle
Can any of the company-specific risk be diversified away by investing in both DONGJIANG ENVIRONMENTAL 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 DONGJIANG ENVIRONMENTAL and American Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DONGJIANG ENVIRONMENTAL H and American Eagle Outfitters, you can compare the effects of market volatilities on DONGJIANG ENVIRONMENTAL 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 DONGJIANG ENVIRONMENTAL with a short position of American Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of DONGJIANG ENVIRONMENTAL and American Eagle.
Diversification Opportunities for DONGJIANG ENVIRONMENTAL and American Eagle
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DONGJIANG and American is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding DONGJIANG ENVIRONMENTAL H 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 DONGJIANG ENVIRONMENTAL 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 DONGJIANG ENVIRONMENTAL H 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 DONGJIANG ENVIRONMENTAL i.e., DONGJIANG ENVIRONMENTAL and American Eagle go up and down completely randomly.
Pair Corralation between DONGJIANG ENVIRONMENTAL and American Eagle
Assuming the 90 days horizon DONGJIANG ENVIRONMENTAL H is expected to under-perform the American Eagle. But the stock apears to be less risky and, when comparing its historical volatility, DONGJIANG ENVIRONMENTAL H is 1.19 times less risky than American Eagle. The stock trades about -0.32 of its potential returns per unit of risk. The American Eagle Outfitters is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,578 in American Eagle Outfitters on October 25, 2024 and sell it today you would earn a total of 72.00 from holding American Eagle Outfitters or generate 4.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DONGJIANG ENVIRONMENTAL H vs. American Eagle Outfitters
Performance |
| Timeline |
| DONGJIANG ENVIRONMENTAL |
| American Eagle Outfitters |
DONGJIANG ENVIRONMENTAL and American Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DONGJIANG ENVIRONMENTAL and American Eagle
The main advantage of trading using opposite DONGJIANG ENVIRONMENTAL and American Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DONGJIANG ENVIRONMENTAL 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.| DONGJIANG ENVIRONMENTAL vs. Apple Inc | DONGJIANG ENVIRONMENTAL vs. Apple Inc | DONGJIANG ENVIRONMENTAL vs. Apple Inc | DONGJIANG ENVIRONMENTAL vs. Apple Inc |
| American Eagle vs. Highlight Communications AG | American Eagle vs. Geely Automobile Holdings | American Eagle vs. Iridium Communications | American Eagle vs. VULCAN MATERIALS |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |