Correlation Between AM EAGLE and TRIPCOM GROUP

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

By analyzing existing cross correlation between AM EAGLE OUTFITTERS and TRIPCOM GROUP DL 00125, you can compare the effects of market volatilities on AM EAGLE and TRIPCOM GROUP 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 AM EAGLE with a short position of TRIPCOM GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of AM EAGLE and TRIPCOM GROUP.

Diversification Opportunities for AM EAGLE and TRIPCOM GROUP

-0.59

Correlation Coefficient

AM EAGLE  TRIPCOM GROUP

Excellent diversification

The 3 months correlation between AFG and TRIPCOM is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding AM EAGLE OUTFITTERS and TRIPCOM GROUP DL 00125 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRIPCOM GROUP DL and AM 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 AM EAGLE OUTFITTERS are associated (or correlated) with TRIPCOM GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRIPCOM GROUP DL has no effect on the direction of AM EAGLE i.e., AM EAGLE and TRIPCOM GROUP go up and down completely randomly.

Pair Corralation between AM EAGLE and TRIPCOM GROUP

Assuming the 90 days trading horizon AM EAGLE OUTFITTERS is expected to under-perform the TRIPCOM GROUP. In addition to that, AM EAGLE is 1.02 times more volatile than TRIPCOM GROUP DL 00125. It trades about -0.03 of its total potential returns per unit of risk. TRIPCOM GROUP DL 00125 is currently generating about 0.03 per unit of volatility. If you would invest  5,952  in TRIPCOM GROUP DL 00125 on October 7, 2024 and sell it today you would earn a total of  140.00  from holding TRIPCOM GROUP DL 00125 or generate 2.35% return on investment over 90 days.

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

AM EAGLE OUTFITTERS  vs.  TRIPCOM GROUP DL 00125

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 latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

TRIPCOM GROUP DL

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TRIPCOM GROUP DL 00125 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, TRIPCOM GROUP is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with AM EAGLE and TRIPCOM GROUP

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

The idea behind AM EAGLE OUTFITTERS and TRIPCOM GROUP DL 00125 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.