Correlation Between MAVEN WIRELESS and AM EAGLE

Can any of the company-specific risk be diversified away by investing in both MAVEN WIRELESS 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 MAVEN WIRELESS and AM EAGLE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MAVEN WIRELESS SWEDEN and AM EAGLE OUTFITTERS, you can compare the effects of market volatilities on MAVEN WIRELESS 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 MAVEN WIRELESS with a short position of AM EAGLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAVEN WIRELESS and AM EAGLE.

Diversification Opportunities for MAVEN WIRELESS and AM EAGLE

0.63

Correlation Coefficient

MAVEN WIRELESS  AM EAGLE

Poor diversification

The 3 months correlation between MAVEN and AFG is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding MAVEN WIRELESS SWEDEN 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 MAVEN WIRELESS 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 MAVEN WIRELESS SWEDEN 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 MAVEN WIRELESS i.e., MAVEN WIRELESS and AM EAGLE go up and down completely randomly.

Pair Corralation between MAVEN WIRELESS and AM EAGLE

Assuming the 90 days horizon MAVEN WIRELESS SWEDEN is expected to under-perform the AM EAGLE. In addition to that, MAVEN WIRELESS is 1.25 times more volatile than AM EAGLE OUTFITTERS. It trades about -0.02 of its total potential returns per unit of risk. AM EAGLE OUTFITTERS is currently generating about 0.0 per unit of volatility. If you would invest  1,728  in AM EAGLE OUTFITTERS on September 28, 2024 and sell it today you would lose (128.00) from holding AM EAGLE OUTFITTERS or give up 7.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

MAVEN WIRELESS SWEDEN  vs.  AM EAGLE OUTFITTERS

MAVEN WIRELESS SWEDEN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MAVEN WIRELESS SWEDEN has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

AM EAGLE OUTFITTERS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AM EAGLE OUTFITTERS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with MAVEN WIRELESS and AM EAGLE

The main advantage of trading using opposite MAVEN WIRELESS and AM EAGLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAVEN WIRELESS 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.

The idea behind MAVEN WIRELESS SWEDEN and AM 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.