Correlation Between CN MODERN and American Eagle

Can any of the company-specific risk be diversified away by investing in both CN MODERN 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 CN MODERN and American Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CN MODERN DAIRY and American Eagle Outfitters, you can compare the effects of market volatilities on CN MODERN 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 CN MODERN with a short position of American Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN MODERN and American Eagle.

Diversification Opportunities for CN MODERN and American Eagle

0.0

Correlation Coefficient

CN MODERN  American Eagle

Pay attention - limited upside

The 3 months correlation between 07M and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CN MODERN DAIRY 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 CN MODERN 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 CN MODERN DAIRY 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 CN MODERN i.e., CN MODERN and American Eagle go up and down completely randomly.

Pair Corralation between CN MODERN and American Eagle

If you would invest  9.45  in CN MODERN DAIRY on October 24, 2024 and sell it today you would earn a total of  0.55  from holding CN MODERN DAIRY or generate 5.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.67%
Values	Daily Returns

CN MODERN DAIRY  vs.  American Eagle Outfitters

CN MODERN DAIRY

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CN MODERN DAIRY are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak primary indicators, CN MODERN may actually be approaching a critical reversion point that can send shares even higher in February 2025.

American Eagle Outfitters

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days American Eagle Outfitters has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with CN MODERN and American Eagle

The main advantage of trading using opposite CN MODERN and American Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN MODERN 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.

The idea behind CN MODERN DAIRY and American Eagle Outfitters pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.