Correlation Between American Eagle and TRIP GROUP

Can any of the company-specific risk be diversified away by investing in both American Eagle and TRIP 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 American Eagle and TRIP GROUP 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 TRIPCOM GROUP DL 00125, you can compare the effects of market volatilities on American Eagle and TRIP 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 American Eagle with a short position of TRIP GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Eagle and TRIP GROUP.

Diversification Opportunities for American Eagle and TRIP GROUP

-0.69

Correlation Coefficient

American Eagle  TRIP GROUP

Excellent diversification

The 3 months correlation between American and TRIP is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding American 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 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 TRIP 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 American Eagle i.e., American Eagle and TRIP GROUP go up and down completely randomly.

Pair Corralation between American Eagle and TRIP GROUP

Assuming the 90 days trading horizon American Eagle Outfitters is expected to under-perform the TRIP GROUP. But the stock apears to be less risky and, when comparing its historical volatility, American Eagle Outfitters is 1.47 times less risky than TRIP GROUP. The stock trades about -0.14 of its potential returns per unit of risk. The TRIPCOM GROUP DL 00125 is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  6,800  in TRIPCOM GROUP DL 00125 on October 22, 2024 and sell it today you would lose (110.00) from holding TRIPCOM GROUP DL 00125 or give up 1.62% of portfolio value over 90 days.

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

American Eagle Outfitters  vs.  TRIPCOM GROUP DL 00125

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 fragile performance in the last few months, the Stock's basic 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.

TRIPCOM GROUP DL

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TRIPCOM GROUP DL 00125 are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, TRIP GROUP reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with American Eagle and TRIP GROUP

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

The idea behind American 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.