Correlation Between NYSE Composite and American Eagle
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and American Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and American Eagle Outfitters, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of American Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and American Eagle.
Diversification Opportunities for NYSE Composite and American Eagle
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and American is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and American Eagle go up and down completely randomly.
Pair Corralation between NYSE Composite and American Eagle
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.33 times more return on investment than American Eagle. However, NYSE Composite is 3.04 times less risky than American Eagle. It trades about 0.24 of its potential returns per unit of risk. American Eagle Outfitters is currently generating about -0.19 per unit of risk. If you would invest 1,954,967 in NYSE Composite on August 28, 2024 and sell it today you would earn a total of 67,069 from holding NYSE Composite or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. American Eagle Outfitters
Performance |
| Timeline |
NYSE Composite and American Eagle Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
American Eagle Outfitters
Pair trading matchups for American Eagle
Pair Trading with NYSE Composite and American Eagle
The main advantage of trading using opposite NYSE Composite and American Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |