Correlation Between American Eagle and Macys
Can any of the company-specific risk be diversified away by investing in both American Eagle and Macys 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 Macys 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 Macys Inc, you can compare the effects of market volatilities on American Eagle and Macys 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 Macys. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Eagle and Macys.
Diversification Opportunities for American Eagle and Macys
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Macys is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding American Eagle Outfitters and Macys Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macys Inc 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 Macys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macys Inc has no effect on the direction of American Eagle i.e., American Eagle and Macys go up and down completely randomly.
Pair Corralation between American Eagle and Macys
Considering the 90-day investment horizon American Eagle Outfitters is expected to under-perform the Macys. In addition to that, American Eagle is 1.81 times more volatile than Macys Inc. It trades about -0.13 of its total potential returns per unit of risk. Macys Inc is currently generating about 0.15 per unit of volatility. If you would invest 1,577 in Macys Inc on September 25, 2024 and sell it today you would earn a total of 105.00 from holding Macys Inc or generate 6.66% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
American Eagle Outfitters vs. Macys Inc
Performance |
Timeline |
American Eagle Outfitters |
Macys Inc |
American Eagle and Macys Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Eagle and Macys
The main advantage of trading using opposite American Eagle and Macys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Eagle position performs unexpectedly, Macys 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 Macys will offset losses from the drop in Macys' long position.American Eagle vs. Macys Inc | American Eagle vs. Wayfair | American Eagle vs. 1StdibsCom | American Eagle vs. AutoNation |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
Transaction History View history of all your transactions and understand their impact on performance | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Stocks Directory Find actively traded stocks across global markets | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing |