Correlation Between MARKET VECTR and American Eagle
Can any of the company-specific risk be diversified away by investing in both MARKET VECTR 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 MARKET VECTR and American Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MARKET VECTR RETAIL and American Eagle Outfitters, you can compare the effects of market volatilities on MARKET VECTR 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 MARKET VECTR with a short position of American Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of MARKET VECTR and American Eagle.
Diversification Opportunities for MARKET VECTR and American Eagle
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MARKET and American is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding MARKET VECTR RETAIL 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 MARKET VECTR 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 MARKET VECTR RETAIL 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 MARKET VECTR i.e., MARKET VECTR and American Eagle go up and down completely randomly.
Pair Corralation between MARKET VECTR and American Eagle
Assuming the 90 days trading horizon MARKET VECTR RETAIL is expected to generate 0.64 times more return on investment than American Eagle. However, MARKET VECTR RETAIL is 1.56 times less risky than American Eagle. It trades about 0.27 of its potential returns per unit of risk. American Eagle Outfitters is currently generating about -0.26 per unit of risk. If you would invest 20,210 in MARKET VECTR RETAIL on August 28, 2024 and sell it today you would earn a total of 1,510 from holding MARKET VECTR RETAIL or generate 7.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
MARKET VECTR RETAIL vs. American Eagle Outfitters
Performance |
| Timeline |
| MARKET VECTR RETAIL |
| American Eagle Outfitters |
MARKET VECTR and American Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MARKET VECTR and American Eagle
The main advantage of trading using opposite MARKET VECTR and American Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MARKET VECTR 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.| MARKET VECTR vs. Apple Inc | MARKET VECTR vs. Apple Inc | MARKET VECTR vs. Apple Inc | MARKET VECTR vs. Microsoft |
| 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |