Correlation Between Reinsurance Group and AM EAGLE
Can any of the company-specific risk be diversified away by investing in both Reinsurance Group 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 Reinsurance Group and AM EAGLE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reinsurance Group of and AM EAGLE OUTFITTERS, you can compare the effects of market volatilities on Reinsurance Group 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 Reinsurance Group with a short position of AM EAGLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reinsurance Group and AM EAGLE.
Diversification Opportunities for Reinsurance Group and AM EAGLE
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Reinsurance and AFG is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Reinsurance Group of 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 Reinsurance Group 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 Reinsurance Group of 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 Reinsurance Group i.e., Reinsurance Group and AM EAGLE go up and down completely randomly.
Pair Corralation between Reinsurance Group and AM EAGLE
Assuming the 90 days trading horizon Reinsurance Group of is expected to generate 1.08 times more return on investment than AM EAGLE. However, Reinsurance Group is 1.08 times more volatile than AM EAGLE OUTFITTERS. It trades about 0.16 of its potential returns per unit of risk. AM EAGLE OUTFITTERS is currently generating about 0.0 per unit of risk. If you would invest 19,614 in Reinsurance Group of on September 1, 2024 and sell it today you would earn a total of 1,986 from holding Reinsurance Group of or generate 10.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reinsurance Group of vs. AM EAGLE OUTFITTERS
Performance |
| Timeline |
| Reinsurance Group |
| AM EAGLE OUTFITTERS |
Reinsurance Group and AM EAGLE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reinsurance Group and AM EAGLE
The main advantage of trading using opposite Reinsurance Group and AM EAGLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reinsurance Group 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.| Reinsurance Group vs. Superior Plus Corp | Reinsurance Group vs. Origin Agritech | Reinsurance Group vs. Identiv | Reinsurance Group vs. INTUITIVE SURGICAL |
| AM EAGLE vs. AVITA Medical | AM EAGLE vs. EAT WELL INVESTMENT | AM EAGLE vs. Diamyd Medical AB | AM EAGLE vs. CompuGroup Medical SE |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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