Correlation Between SEKISUI CHEMICAL and American Eagle
Can any of the company-specific risk be diversified away by investing in both SEKISUI CHEMICAL 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 SEKISUI CHEMICAL and American Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEKISUI CHEMICAL and American Eagle Outfitters, you can compare the effects of market volatilities on SEKISUI CHEMICAL 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 SEKISUI CHEMICAL with a short position of American Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEKISUI CHEMICAL and American Eagle.
Diversification Opportunities for SEKISUI CHEMICAL and American Eagle
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SEKISUI and American is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding SEKISUI CHEMICAL 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 SEKISUI CHEMICAL 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 SEKISUI CHEMICAL 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 SEKISUI CHEMICAL i.e., SEKISUI CHEMICAL and American Eagle go up and down completely randomly.
Pair Corralation between SEKISUI CHEMICAL and American Eagle
Assuming the 90 days trading horizon SEKISUI CHEMICAL is expected to generate 0.69 times more return on investment than American Eagle. However, SEKISUI CHEMICAL is 1.45 times less risky than American Eagle. It trades about -0.09 of its potential returns per unit of risk. American Eagle Outfitters is currently generating about -0.08 per unit of risk. If you would invest 1,640 in SEKISUI CHEMICAL on November 3, 2024 and sell it today you would lose (60.00) from holding SEKISUI CHEMICAL or give up 3.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
SEKISUI CHEMICAL vs. American Eagle Outfitters
Performance |
| Timeline |
| SEKISUI CHEMICAL |
| American Eagle Outfitters |
SEKISUI CHEMICAL and American Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEKISUI CHEMICAL and American Eagle
The main advantage of trading using opposite SEKISUI CHEMICAL and American Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEKISUI CHEMICAL 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.| SEKISUI CHEMICAL vs. X FAB Silicon Foundries | SEKISUI CHEMICAL vs. CREO MEDICAL GRP | SEKISUI CHEMICAL vs. Diamyd Medical AB | SEKISUI CHEMICAL vs. Clearside Biomedical |
| American Eagle vs. GALENA MINING LTD | American Eagle vs. ARDAGH METAL PACDL 0001 | American Eagle vs. SLR Investment Corp | American Eagle vs. MAGNUM MINING EXP |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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