Correlation Between American Eagle and Amazon

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both American Eagle and Amazon 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 Amazon 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 Amazon Inc, you can compare the effects of market volatilities on American Eagle and Amazon 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 Amazon. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Eagle and Amazon.

Diversification Opportunities for American Eagle and Amazon

-0.07
  Correlation Coefficient

Good diversification

The 3 months correlation between American and Amazon is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding American Eagle Outfitters and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc 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 Amazon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon Inc has no effect on the direction of American Eagle i.e., American Eagle and Amazon go up and down completely randomly.

Pair Corralation between American Eagle and Amazon

Considering the 90-day investment horizon American Eagle Outfitters is expected to generate 1.33 times more return on investment than Amazon. However, American Eagle is 1.33 times more volatile than Amazon Inc. It trades about 0.0 of its potential returns per unit of risk. Amazon Inc is currently generating about -0.02 per unit of risk. If you would invest  2,333  in American Eagle Outfitters on November 4, 2022 and sell it today you would lose (629.00)  from holding American Eagle Outfitters or give up 26.96% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

American Eagle Outfitters  vs.  Amazon Inc

 Performance (%) 
       Timeline  
American Eagle Outfitters 
American Performance
15 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in American Eagle Outfitters are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite sluggish technical and fundamental indicators, American Eagle disclosed solid returns over the last few months and may actually be approaching a breakup point.

American Price Channel

Amazon Inc 
Amazon Performance
10 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Amazon Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Amazon disclosed solid returns over the last few months and may actually be approaching a breakup point.

Amazon Price Channel

American Eagle and Amazon Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with American Eagle and Amazon

The main advantage of trading using opposite American Eagle and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Eagle position performs unexpectedly, Amazon 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 Amazon will offset losses from the drop in Amazon's long position.
American Eagle vs. Martin Marietta Materials
American Eagle vs. The Yokohama Rubber
American Eagle vs. SM Investments
American Eagle vs. Materialise NV
The idea behind American Eagle Outfitters and Amazon Inc 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.
Amazon vs. Dentsply Sirona
Amazon vs. Tabula Rasa HealthCare
Amazon vs. GE HealthCare Technologies
Amazon vs. DaVita HealthCare Partners
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

Other Complementary Tools

Global Correlations
Find global opportunities by holding instruments from different markets
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Share Portfolio
Track or share privately all of your investments from the convenience of any device
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes