Correlation Between Transportadora and American Eagle
Can any of the company-specific risk be diversified away by investing in both Transportadora 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 Transportadora and American Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transportadora de Gas and American Eagle Outfitters, you can compare the effects of market volatilities on Transportadora 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 Transportadora with a short position of American Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transportadora and American Eagle.
Diversification Opportunities for Transportadora and American Eagle
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Transportadora and American is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Transportadora de Gas 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 Transportadora 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 Transportadora de Gas 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 Transportadora i.e., Transportadora and American Eagle go up and down completely randomly.
Pair Corralation between Transportadora and American Eagle
Assuming the 90 days trading horizon Transportadora de Gas is expected to generate 2.88 times more return on investment than American Eagle. However, Transportadora is 2.88 times more volatile than American Eagle Outfitters. It trades about 0.32 of its potential returns per unit of risk. American Eagle Outfitters is currently generating about 0.0 per unit of risk. If you would invest 2,020 in Transportadora de Gas on September 3, 2024 and sell it today you would earn a total of 840.00 from holding Transportadora de Gas or generate 41.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transportadora de Gas vs. American Eagle Outfitters
Performance |
| Timeline |
| Transportadora de Gas |
| American Eagle Outfitters |
Transportadora and American Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transportadora and American Eagle
The main advantage of trading using opposite Transportadora and American Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transportadora 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.| Transportadora vs. COPLAND ROAD CAPITAL | Transportadora vs. H FARM SPA | Transportadora vs. BII Railway Transportation | Transportadora vs. Penta Ocean Construction Co |
| American Eagle vs. Apple Inc | American Eagle vs. Apple Inc | American Eagle vs. Apple Inc | American Eagle vs. Apple 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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