Correlation Between Express and American Eagle
Can any of the company-specific risk be diversified away by investing in both Express 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 Express and American Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Express and American Eagle Outfitters, you can compare the effects of market volatilities on Express 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 Express with a short position of American Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Express and American Eagle.
Diversification Opportunities for Express and American Eagle
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Express and American is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Express 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 Express 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 Express 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 Express i.e., Express and American Eagle go up and down completely randomly.
Pair Corralation between Express and American Eagle
Given the investment horizon of 90 days Express is expected to under-perform the American Eagle. In addition to that, Express is 2.02 times more volatile than American Eagle Outfitters. It trades about 0.0 of its total potential returns per unit of risk. American Eagle Outfitters is currently generating about 0.03 per unit of volatility. If you would invest 1,434 in American Eagle Outfitters on August 28, 2024 and sell it today you would earn a total of 355.00 from holding American Eagle Outfitters or generate 24.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 28.78% |
| Values | Daily Returns |
Express vs. American Eagle Outfitters
Performance |
| Timeline |
| Express |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| American Eagle Outfitters |
Express and American Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Express and American Eagle
The main advantage of trading using opposite Express and American Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Express 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.| Express vs. Koss Corporation | Express vs. BlackBerry | Express vs. Castor Maritime | Express vs. Clover Health Investments |
| American Eagle vs. Urban Outfitters | American Eagle vs. Foot Locker | American Eagle vs. Childrens Place | American Eagle vs. Abercrombie Fitch |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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