Correlation Between NAKED WINES and American Eagle
Can any of the company-specific risk be diversified away by investing in both NAKED WINES 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 NAKED WINES and American Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NAKED WINES PLC and American Eagle Outfitters, you can compare the effects of market volatilities on NAKED WINES 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 NAKED WINES with a short position of American Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAKED WINES and American Eagle.
Diversification Opportunities for NAKED WINES and American Eagle
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NAKED and American is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding NAKED WINES PLC 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 NAKED WINES 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 NAKED WINES PLC 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 NAKED WINES i.e., NAKED WINES and American Eagle go up and down completely randomly.
Pair Corralation between NAKED WINES and American Eagle
Assuming the 90 days horizon NAKED WINES PLC is expected to generate 1.82 times more return on investment than American Eagle. However, NAKED WINES is 1.82 times more volatile than American Eagle Outfitters. It trades about 0.09 of its potential returns per unit of risk. American Eagle Outfitters is currently generating about -0.07 per unit of risk. If you would invest 56.00 in NAKED WINES PLC on November 4, 2024 and sell it today you would earn a total of 4.00 from holding NAKED WINES PLC or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NAKED WINES PLC vs. American Eagle Outfitters
Performance |
| Timeline |
| NAKED WINES PLC |
| American Eagle Outfitters |
NAKED WINES and American Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NAKED WINES and American Eagle
The main advantage of trading using opposite NAKED WINES and American Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAKED WINES 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.| NAKED WINES vs. Major Drilling Group | NAKED WINES vs. Easy Software AG | NAKED WINES vs. VELA TECHNOLPLC LS 0001 | NAKED WINES vs. BioNTech SE |
| American Eagle vs. CARSALESCOM | American Eagle vs. Geely Automobile Holdings | American Eagle vs. East Africa Metals | American Eagle vs. De Grey Mining |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |