Correlation Between American Express and Grieg Seafood
Can any of the company-specific risk be diversified away by investing in both American Express and Grieg Seafood 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 Express and Grieg Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express Co and Grieg Seafood, you can compare the effects of market volatilities on American Express and Grieg Seafood 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 Express with a short position of Grieg Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Grieg Seafood.
Diversification Opportunities for American Express and Grieg Seafood
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Grieg is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding American Express Co and Grieg Seafood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grieg Seafood and American Express 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 Express Co are associated (or correlated) with Grieg Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grieg Seafood has no effect on the direction of American Express i.e., American Express and Grieg Seafood go up and down completely randomly.
Pair Corralation between American Express and Grieg Seafood
Assuming the 90 days trading horizon American Express is expected to generate 1.83 times less return on investment than Grieg Seafood. But when comparing it to its historical volatility, American Express Co is 2.08 times less risky than Grieg Seafood. It trades about 0.2 of its potential returns per unit of risk. Grieg Seafood is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 6,183 in Grieg Seafood on October 28, 2024 and sell it today you would earn a total of 637.00 from holding Grieg Seafood or generate 10.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express Co vs. Grieg Seafood
Performance |
| Timeline |
| American Express |
| Grieg Seafood |
American Express and Grieg Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Grieg Seafood
The main advantage of trading using opposite American Express and Grieg Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Grieg Seafood 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 Grieg Seafood will offset losses from the drop in Grieg Seafood's long position.| American Express vs. Diversified Energy | American Express vs. Vietnam Enterprise Investments | American Express vs. CleanTech Lithium plc | American Express vs. LBG Media PLC |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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