Correlation Between Apple and AM EAGLE
Can any of the company-specific risk be diversified away by investing in both Apple and AM EAGLE 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 Apple and AM EAGLE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and AM EAGLE OUTFITTERS, you can compare the effects of market volatilities on Apple and AM EAGLE 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 Apple with a short position of AM EAGLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and AM EAGLE.
Diversification Opportunities for Apple and AM EAGLE
Very good diversification
The 3 months correlation between Apple and AFG is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and AM EAGLE OUTFITTERS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AM EAGLE OUTFITTERS and Apple 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 Apple Inc are associated (or correlated) with AM EAGLE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AM EAGLE OUTFITTERS has no effect on the direction of Apple i.e., Apple and AM EAGLE go up and down completely randomly.
Pair Corralation between Apple and AM EAGLE
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.45 times more return on investment than AM EAGLE. However, Apple Inc is 2.21 times less risky than AM EAGLE. It trades about 0.2 of its potential returns per unit of risk. AM EAGLE OUTFITTERS is currently generating about -0.02 per unit of risk. If you would invest 20,131 in Apple Inc on September 13, 2024 and sell it today you would earn a total of 3,549 from holding Apple Inc or generate 17.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Apple Inc vs. AM EAGLE OUTFITTERS
Performance |
Timeline |
Apple Inc |
AM EAGLE OUTFITTERS |
Apple and AM EAGLE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Apple and AM EAGLE
The main advantage of trading using opposite Apple and AM EAGLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, AM EAGLE 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 AM EAGLE will offset losses from the drop in AM EAGLE's long position.Apple vs. LION ONE METALS | Apple vs. MCEWEN MINING INC | Apple vs. Universal Entertainment | Apple vs. TOWNSQUARE MEDIA INC |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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