Correlation Between Corporate Office and AM EAGLE
Can any of the company-specific risk be diversified away by investing in both Corporate Office and AM 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 Corporate Office and AM EAGLE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corporate Office Properties and AM EAGLE OUTFITTERS, you can compare the effects of market volatilities on Corporate Office and AM 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 Corporate Office with a short position of AM EAGLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporate Office and AM EAGLE.
Diversification Opportunities for Corporate Office and AM EAGLE
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Corporate and AFG is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Corporate Office Properties and AM EAGLE OUTFITTERS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AM EAGLE OUTFITTERS and Corporate Office 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 Corporate Office Properties are associated (or correlated) with AM EAGLE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AM EAGLE OUTFITTERS has no effect on the direction of Corporate Office i.e., Corporate Office and AM EAGLE go up and down completely randomly.
Pair Corralation between Corporate Office and AM EAGLE
Assuming the 90 days horizon Corporate Office Properties is expected to generate 0.49 times more return on investment than AM EAGLE. However, Corporate Office Properties is 2.04 times less risky than AM EAGLE. It trades about 0.21 of its potential returns per unit of risk. AM EAGLE OUTFITTERS is currently generating about -0.05 per unit of risk. If you would invest 2,612 in Corporate Office Properties on August 28, 2024 and sell it today you would earn a total of 428.00 from holding Corporate Office Properties or generate 16.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Corporate Office Properties vs. AM EAGLE OUTFITTERS
Performance |
| Timeline |
| Corporate Office Pro |
| AM EAGLE OUTFITTERS |
Corporate Office and AM EAGLE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corporate Office and AM EAGLE
The main advantage of trading using opposite Corporate Office and AM EAGLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporate Office position performs unexpectedly, AM 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 AM EAGLE will offset losses from the drop in AM EAGLE's long position.| Corporate Office vs. Superior Plus Corp | Corporate Office vs. NMI Holdings | Corporate Office vs. Origin Agritech | Corporate Office vs. SIVERS SEMICONDUCTORS AB |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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