Correlation Between AM EAGLE and NTG Nordic

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

Diversification Opportunities for AM EAGLE and NTG Nordic

0.32

Correlation Coefficient

AM EAGLE  NTG Nordic

Weak diversification

The 3 months correlation between AFG and NTG is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding AM EAGLE OUTFITTERS and NTG Nordic Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NTG Nordic Transport 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 NTG Nordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NTG Nordic Transport has no effect on the direction of AM EAGLE i.e., AM EAGLE and NTG Nordic go up and down completely randomly.

Pair Corralation between AM EAGLE and NTG Nordic

Assuming the 90 days trading horizon AM EAGLE OUTFITTERS is expected to generate 1.13 times more return on investment than NTG Nordic. However, AM EAGLE is 1.13 times more volatile than NTG Nordic Transport. It trades about 0.06 of its potential returns per unit of risk. NTG Nordic Transport is currently generating about -0.03 per unit of risk. If you would invest  1,037  in AM EAGLE OUTFITTERS on September 14, 2024 and sell it today you would earn a total of  623.00  from holding AM EAGLE OUTFITTERS or generate 60.08% return on investment over 90 days.

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

AM EAGLE OUTFITTERS  vs.  NTG Nordic Transport

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 comparatively stable technical and fundamental indicators, AM EAGLE is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

NTG Nordic Transport

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NTG Nordic Transport has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, NTG Nordic is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with AM EAGLE and NTG Nordic

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

The idea behind AM EAGLE OUTFITTERS and NTG Nordic Transport 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..