Correlation Between BRAGG GAMING and American Eagle
Can any of the company-specific risk be diversified away by investing in both BRAGG GAMING 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 BRAGG GAMING and American Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BRAGG GAMING GRP and American Eagle Outfitters, you can compare the effects of market volatilities on BRAGG GAMING 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 BRAGG GAMING with a short position of American Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRAGG GAMING and American Eagle.
Diversification Opportunities for BRAGG GAMING and American Eagle
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BRAGG and American is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding BRAGG GAMING GRP 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 BRAGG GAMING 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 BRAGG GAMING GRP 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 BRAGG GAMING i.e., BRAGG GAMING and American Eagle go up and down completely randomly.
Pair Corralation between BRAGG GAMING and American Eagle
Assuming the 90 days horizon BRAGG GAMING is expected to generate 2.18 times less return on investment than American Eagle. In addition to that, BRAGG GAMING is 1.2 times more volatile than American Eagle Outfitters. It trades about 0.01 of its total potential returns per unit of risk. American Eagle Outfitters is currently generating about 0.03 per unit of volatility. If you would invest 1,307 in American Eagle Outfitters on October 11, 2024 and sell it today you would earn a total of 303.00 from holding American Eagle Outfitters or generate 23.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
BRAGG GAMING GRP vs. American Eagle Outfitters
Performance |
| Timeline |
| BRAGG GAMING GRP |
| American Eagle Outfitters |
BRAGG GAMING and American Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BRAGG GAMING and American Eagle
The main advantage of trading using opposite BRAGG GAMING and American Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRAGG GAMING 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.| BRAGG GAMING vs. Ultra Clean Holdings | BRAGG GAMING vs. Insteel Industries | BRAGG GAMING vs. Mount Gibson Iron | BRAGG GAMING vs. GALENA MINING LTD |
| American Eagle vs. Scottish Mortgage Investment | American Eagle vs. Shenzhen Investment Limited | American Eagle vs. DELTA AIR LINES | American Eagle vs. FIRST SAVINGS FINL |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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