Correlation Between INFORMATION SVC and AM EAGLE
Can any of the company-specific risk be diversified away by investing in both INFORMATION SVC 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 INFORMATION SVC and AM EAGLE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INFORMATION SVC GRP and AM EAGLE OUTFITTERS, you can compare the effects of market volatilities on INFORMATION SVC 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 INFORMATION SVC with a short position of AM EAGLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of INFORMATION SVC and AM EAGLE.
Diversification Opportunities for INFORMATION SVC and AM EAGLE
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between INFORMATION and AFG is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding INFORMATION SVC GRP 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 INFORMATION SVC 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 INFORMATION SVC GRP 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 INFORMATION SVC i.e., INFORMATION SVC and AM EAGLE go up and down completely randomly.
Pair Corralation between INFORMATION SVC and AM EAGLE
Assuming the 90 days horizon INFORMATION SVC GRP is expected to under-perform the AM EAGLE. But the stock apears to be less risky and, when comparing its historical volatility, INFORMATION SVC GRP is 1.22 times less risky than AM EAGLE. The stock trades about -0.01 of its potential returns per unit of risk. The AM EAGLE OUTFITTERS is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,453 in AM EAGLE OUTFITTERS on August 30, 2024 and sell it today you would earn a total of 297.00 from holding AM EAGLE OUTFITTERS or generate 20.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INFORMATION SVC GRP vs. AM EAGLE OUTFITTERS
Performance |
| Timeline |
| INFORMATION SVC GRP |
| AM EAGLE OUTFITTERS |
INFORMATION SVC and AM EAGLE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INFORMATION SVC and AM EAGLE
The main advantage of trading using opposite INFORMATION SVC and AM EAGLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INFORMATION SVC 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.| INFORMATION SVC vs. Apple Inc | INFORMATION SVC vs. Apple Inc | INFORMATION SVC vs. Superior Plus Corp | INFORMATION SVC vs. SIVERS SEMICONDUCTORS AB |
| AM EAGLE vs. Apple Inc | AM EAGLE vs. Apple Inc | AM EAGLE vs. Superior Plus Corp | AM EAGLE 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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