Correlation Between RumbleON and American Eagle
Can any of the company-specific risk be diversified away by investing in both RumbleON 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 RumbleON and American Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RumbleON and American Eagle Outfitters, you can compare the effects of market volatilities on RumbleON 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 RumbleON with a short position of American Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of RumbleON and American Eagle.
Diversification Opportunities for RumbleON and American Eagle
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RumbleON and American is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding RumbleON 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 RumbleON 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 RumbleON 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 RumbleON i.e., RumbleON and American Eagle go up and down completely randomly.
Pair Corralation between RumbleON and American Eagle
Given the investment horizon of 90 days RumbleON is expected to generate 2.53 times more return on investment than American Eagle. However, RumbleON is 2.53 times more volatile than American Eagle Outfitters. It trades about 0.07 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 543.00 in RumbleON on August 28, 2024 and sell it today you would earn a total of 25.00 from holding RumbleON or generate 4.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RumbleON vs. American Eagle Outfitters
Performance |
| Timeline |
| RumbleON |
| American Eagle Outfitters |
RumbleON and American Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RumbleON and American Eagle
The main advantage of trading using opposite RumbleON and American Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RumbleON 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.| RumbleON vs. Group 1 Automotive | RumbleON vs. Penske Automotive Group | RumbleON vs. Lithia Motors | RumbleON vs. AutoNation |
| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |