Correlation Between American Eagle and LINMON MEDIA

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

Diversification Opportunities for American Eagle and LINMON MEDIA

-0.05

Correlation Coefficient

American Eagle  LINMON MEDIA

Good diversification

The 3 months correlation between American and LINMON is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding American Eagle Outfitters and LINMON MEDIA LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LINMON MEDIA LTD 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 LINMON MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LINMON MEDIA LTD has no effect on the direction of American Eagle i.e., American Eagle and LINMON MEDIA go up and down completely randomly.

Pair Corralation between American Eagle and LINMON MEDIA

Assuming the 90 days trading horizon American Eagle Outfitters is expected to generate 0.66 times more return on investment than LINMON MEDIA. However, American Eagle Outfitters is 1.51 times less risky than LINMON MEDIA. It trades about 0.0 of its potential returns per unit of risk. LINMON MEDIA LTD is currently generating about -0.01 per unit of risk. If you would invest  1,021  in American Eagle Outfitters on March 30, 2025 and sell it today you would lose (181.00) from holding American Eagle Outfitters or give up 17.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

American Eagle Outfitters  vs.  LINMON MEDIA LTD

American Eagle Outfitters

Risk-Adjusted Performance

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 technical and fundamental indicators remain comparatively stable which may send shares a bit higher in July 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

LINMON MEDIA LTD

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in LINMON MEDIA LTD are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, LINMON MEDIA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with American Eagle and LINMON MEDIA

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

The idea behind American Eagle Outfitters and LINMON MEDIA LTD 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.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.