Correlation Between American Eagle and Jowell Global

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

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

Diversification Opportunities for American Eagle and Jowell Global

0.03

Correlation Coefficient

American Eagle  Jowell Global

Significant diversification

The 3 months correlation between American and Jowell is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding American Eagle Outfitters and Jowell Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jowell Global and American Eagle 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 American Eagle Outfitters are associated (or correlated) with Jowell Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jowell Global has no effect on the direction of American Eagle i.e., American Eagle and Jowell Global go up and down completely randomly.

Pair Corralation between American Eagle and Jowell Global

Considering the 90-day investment horizon American Eagle Outfitters is expected to under-perform the Jowell Global. But the stock apears to be less risky and, when comparing its historical volatility, American Eagle Outfitters is 1.93 times less risky than Jowell Global. The stock trades about -0.22 of its potential returns per unit of risk. The Jowell Global is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  314.00  in Jowell Global on December 1, 2024 and sell it today you would lose (32.00) from holding Jowell Global or give up 10.19% of portfolio value over 90 days.

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

American Eagle Outfitters  vs.  Jowell Global

American Eagle Outfitters

Risk-Adjusted Performance

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 unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Jowell Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jowell Global has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Jowell Global is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with American Eagle and Jowell Global

The main advantage of trading using opposite American Eagle and Jowell Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Eagle position performs unexpectedly, Jowell Global 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 Jowell Global will offset losses from the drop in Jowell Global's long position.

The idea behind American Eagle Outfitters and Jowell Global 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.