Correlation Between SunOpta and American Eagle
Can any of the company-specific risk be diversified away by investing in both SunOpta 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 SunOpta and American Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunOpta and American Eagle Outfitters, you can compare the effects of market volatilities on SunOpta 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 SunOpta with a short position of American Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunOpta and American Eagle.
Diversification Opportunities for SunOpta and American Eagle
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SunOpta and American is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding SunOpta 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 SunOpta 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 SunOpta 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 SunOpta i.e., SunOpta and American Eagle go up and down completely randomly.
Pair Corralation between SunOpta and American Eagle
Given the investment horizon of 90 days SunOpta is expected to generate 0.88 times more return on investment than American Eagle. However, SunOpta is 1.13 times less risky than American Eagle. It trades about 0.32 of its potential returns per unit of risk. American Eagle Outfitters is currently generating about 0.02 per unit of risk. If you would invest 675.00 in SunOpta on September 3, 2024 and sell it today you would earn a total of 100.00 from holding SunOpta or generate 14.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SunOpta vs. American Eagle Outfitters
Performance |
| Timeline |
| SunOpta |
| American Eagle Outfitters |
SunOpta and American Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunOpta and American Eagle
The main advantage of trading using opposite SunOpta and American Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunOpta 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.| SunOpta vs. Seneca Foods Corp | SunOpta vs. Central Garden Pet | SunOpta vs. Central Garden Pet | SunOpta vs. Natures Sunshine Products |
| American Eagle vs. Ross Stores | American Eagle vs. Childrens Place | American Eagle vs. Buckle Inc | American Eagle vs. Guess Inc |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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