Correlation Between AM EAGLE and Oracle

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

Diversification Opportunities for AM EAGLE and Oracle

-0.4

Correlation Coefficient

AM EAGLE  Oracle

Very good diversification

The 3 months correlation between AFG and Oracle is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding AM EAGLE OUTFITTERS and Oracle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oracle 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 Oracle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oracle has no effect on the direction of AM EAGLE i.e., AM EAGLE and Oracle go up and down completely randomly.

Pair Corralation between AM EAGLE and Oracle

Assuming the 90 days trading horizon AM EAGLE OUTFITTERS is expected to under-perform the Oracle. In addition to that, AM EAGLE is 1.39 times more volatile than Oracle. It trades about -0.06 of its total potential returns per unit of risk. Oracle is currently generating about -0.01 per unit of volatility. If you would invest  16,056  in Oracle on October 10, 2024 and sell it today you would lose (428.00) from holding Oracle or give up 2.67% of portfolio value over 90 days.

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

AM EAGLE OUTFITTERS  vs.  Oracle

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.

Oracle

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with AM EAGLE and Oracle

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

The idea behind AM EAGLE OUTFITTERS and Oracle 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.