Correlation Between Encavis AG and American Eagle
Can any of the company-specific risk be diversified away by investing in both Encavis AG 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 Encavis AG and American Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Encavis AG and American Eagle Outfitters, you can compare the effects of market volatilities on Encavis AG 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 Encavis AG with a short position of American Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Encavis AG and American Eagle.
Diversification Opportunities for Encavis AG and American Eagle
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Encavis and American is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Encavis AG 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 Encavis AG 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 Encavis AG 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 Encavis AG i.e., Encavis AG and American Eagle go up and down completely randomly.
Pair Corralation between Encavis AG and American Eagle
Assuming the 90 days trading horizon Encavis AG is not expected to generate positive returns. However, Encavis AG is 34.48 times less risky than American Eagle. It waists most of its returns potential to compensate for thr risk taken. American Eagle is generating about -0.08 per unit of risk. If you would invest 1,746 in Encavis AG on November 2, 2024 and sell it today you would earn a total of 0.00 from holding Encavis AG or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Encavis AG vs. American Eagle Outfitters
Performance |
| Timeline |
| Encavis AG |
| American Eagle Outfitters |
Encavis AG and American Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Encavis AG and American Eagle
The main advantage of trading using opposite Encavis AG and American Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Encavis AG 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.| Encavis AG vs. HELIOS TECHS INC | Encavis AG vs. Easy Software AG | Encavis AG vs. GAZTRTECHNIUADR15EO01 | Encavis AG vs. Webster Financial |
| American Eagle vs. Cal Maine Foods | American Eagle vs. Air New Zealand | American Eagle vs. Wizz Air Holdings | American Eagle vs. Pentair plc |
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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