Correlation Between American Eagle and COEUR MINING

Can any of the company-specific risk be diversified away by investing in both American Eagle and COEUR MINING 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 COEUR MINING 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 COEUR MINING, you can compare the effects of market volatilities on American Eagle and COEUR MINING 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 COEUR MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Eagle and COEUR MINING.

Diversification Opportunities for American Eagle and COEUR MINING

0.26

Correlation Coefficient

American Eagle  COEUR MINING

Modest diversification

The 3 months correlation between American and COEUR is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding American Eagle Outfitters and COEUR MINING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COEUR MINING 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 COEUR MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COEUR MINING has no effect on the direction of American Eagle i.e., American Eagle and COEUR MINING go up and down completely randomly.

Pair Corralation between American Eagle and COEUR MINING

Assuming the 90 days trading horizon American Eagle is expected to generate 2.14 times less return on investment than COEUR MINING. But when comparing it to its historical volatility, American Eagle Outfitters is 1.61 times less risky than COEUR MINING. It trades about 0.05 of its potential returns per unit of risk. COEUR MINING is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  261.00  in COEUR MINING on October 22, 2024 and sell it today you would earn a total of  345.00  from holding COEUR MINING or generate 132.18% return on investment over 90 days.

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

American Eagle Outfitters  vs.  COEUR MINING

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 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 February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

COEUR MINING

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days COEUR MINING has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with American Eagle and COEUR MINING

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

The idea behind American Eagle Outfitters and COEUR MINING 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.

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 Commodity Directory module to find actively traded commodities issued by global exchanges.