Correlation Between ALERION CLEANPOWER and AM EAGLE
Can any of the company-specific risk be diversified away by investing in both ALERION CLEANPOWER and AM 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 ALERION CLEANPOWER and AM EAGLE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALERION CLEANPOWER and AM EAGLE OUTFITTERS, you can compare the effects of market volatilities on ALERION CLEANPOWER and AM 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 ALERION CLEANPOWER with a short position of AM EAGLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALERION CLEANPOWER and AM EAGLE.
Diversification Opportunities for ALERION CLEANPOWER and AM EAGLE
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ALERION and AFG is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding ALERION CLEANPOWER and AM EAGLE OUTFITTERS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AM EAGLE OUTFITTERS and ALERION CLEANPOWER 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 ALERION CLEANPOWER are associated (or correlated) with AM EAGLE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AM EAGLE OUTFITTERS has no effect on the direction of ALERION CLEANPOWER i.e., ALERION CLEANPOWER and AM EAGLE go up and down completely randomly.
Pair Corralation between ALERION CLEANPOWER and AM EAGLE
Assuming the 90 days trading horizon ALERION CLEANPOWER is expected to generate 1.1 times more return on investment than AM EAGLE. However, ALERION CLEANPOWER is 1.1 times more volatile than AM EAGLE OUTFITTERS. It trades about 0.11 of its potential returns per unit of risk. AM EAGLE OUTFITTERS is currently generating about -0.06 per unit of risk. If you would invest 1,594 in ALERION CLEANPOWER on September 3, 2024 and sell it today you would earn a total of 186.00 from holding ALERION CLEANPOWER or generate 11.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ALERION CLEANPOWER vs. AM EAGLE OUTFITTERS
Performance |
| Timeline |
| ALERION CLEANPOWER |
| AM EAGLE OUTFITTERS |
ALERION CLEANPOWER and AM EAGLE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALERION CLEANPOWER and AM EAGLE
The main advantage of trading using opposite ALERION CLEANPOWER and AM EAGLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALERION CLEANPOWER position performs unexpectedly, AM 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 AM EAGLE will offset losses from the drop in AM EAGLE's long position.| ALERION CLEANPOWER vs. Apollo Medical Holdings | ALERION CLEANPOWER vs. American Airlines Group | ALERION CLEANPOWER vs. IMAGIN MEDICAL INC | ALERION CLEANPOWER vs. AVITA Medical |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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