Correlation Between REVO INSURANCE and American Eagle
Can any of the company-specific risk be diversified away by investing in both REVO INSURANCE 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 REVO INSURANCE and American Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REVO INSURANCE SPA and American Eagle Outfitters, you can compare the effects of market volatilities on REVO INSURANCE 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 REVO INSURANCE with a short position of American Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of REVO INSURANCE and American Eagle.
Diversification Opportunities for REVO INSURANCE and American Eagle
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between REVO and American is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding REVO INSURANCE SPA 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 REVO INSURANCE 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 REVO INSURANCE SPA 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 REVO INSURANCE i.e., REVO INSURANCE and American Eagle go up and down completely randomly.
Pair Corralation between REVO INSURANCE and American Eagle
Assuming the 90 days horizon REVO INSURANCE SPA is expected to generate 0.57 times more return on investment than American Eagle. However, REVO INSURANCE SPA is 1.77 times less risky than American Eagle. It trades about 0.04 of its potential returns per unit of risk. American Eagle Outfitters is currently generating about -0.09 per unit of risk. If you would invest 1,140 in REVO INSURANCE SPA on November 7, 2024 and sell it today you would earn a total of 10.00 from holding REVO INSURANCE SPA or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
REVO INSURANCE SPA vs. American Eagle Outfitters
Performance |
| Timeline |
| REVO INSURANCE SPA |
| American Eagle Outfitters |
REVO INSURANCE and American Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REVO INSURANCE and American Eagle
The main advantage of trading using opposite REVO INSURANCE and American Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REVO INSURANCE 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.| REVO INSURANCE vs. SILICON LABORATOR | REVO INSURANCE vs. Sekisui Chemical Co | REVO INSURANCE vs. PACIFIC ONLINE | REVO INSURANCE vs. TIANDE CHEMICAL |
| American Eagle vs. PNC Financial Services | American Eagle vs. Synovus Financial Corp | American Eagle vs. Renesas Electronics | American Eagle vs. TT Electronics 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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