Correlation Between TIANDE CHEMICAL and American Eagle
Can any of the company-specific risk be diversified away by investing in both TIANDE 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 TIANDE 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 TIANDE CHEMICAL and American Eagle Outfitters, you can compare the effects of market volatilities on TIANDE 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 TIANDE CHEMICAL with a short position of American Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of TIANDE CHEMICAL and American Eagle.
Diversification Opportunities for TIANDE CHEMICAL and American Eagle
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TIANDE and American is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding TIANDE 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 TIANDE 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 TIANDE 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 TIANDE CHEMICAL i.e., TIANDE CHEMICAL and American Eagle go up and down completely randomly.
Pair Corralation between TIANDE CHEMICAL and American Eagle
Assuming the 90 days trading horizon TIANDE CHEMICAL is expected to generate 0.98 times more return on investment than American Eagle. However, TIANDE CHEMICAL is 1.02 times less risky than American Eagle. It trades about 0.06 of its potential returns per unit of risk. American Eagle Outfitters is currently generating about 0.01 per unit of risk. If you would invest 5.25 in TIANDE CHEMICAL on September 3, 2024 and sell it today you would earn a total of 2.00 from holding TIANDE CHEMICAL or generate 38.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
TIANDE CHEMICAL vs. American Eagle Outfitters
Performance |
| Timeline |
| TIANDE CHEMICAL |
| American Eagle Outfitters |
TIANDE CHEMICAL and American Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TIANDE CHEMICAL and American Eagle
The main advantage of trading using opposite TIANDE CHEMICAL and American Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TIANDE 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.| TIANDE CHEMICAL vs. The Boston Beer | TIANDE CHEMICAL vs. National Beverage Corp | TIANDE CHEMICAL vs. Perseus Mining Limited | TIANDE CHEMICAL vs. Thai Beverage Public |
| 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |