Correlation Between Visa and American Express
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By analyzing existing cross correlation between Visa Inc and American Express, you can compare the effects of market volatilities on Visa and American Express 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 Visa with a short position of American Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and American Express.
Diversification Opportunities for Visa and American Express
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Visa and American is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Visa Inc and American Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express and Visa 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 Visa Inc are associated (or correlated) with American Express. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Express has no effect on the direction of Visa i.e., Visa and American Express go up and down completely randomly.
Pair Corralation between Visa and American Express
Assuming the 90 days trading horizon Visa Inc is expected to generate 0.67 times more return on investment than American Express. However, Visa Inc is 1.5 times less risky than American Express. It trades about 0.37 of its potential returns per unit of risk. American Express is currently generating about 0.17 per unit of risk. If you would invest 30,855 in Visa Inc on November 3, 2024 and sell it today you would earn a total of 2,330 from holding Visa Inc or generate 7.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Inc vs. American Express
Performance |
| Timeline |
| Visa Inc |
| American Express |
Visa and American Express Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and American Express
The main advantage of trading using opposite Visa and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, American Express 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 American Express will offset losses from the drop in American Express' long position.| Visa vs. Verizon Communications | Visa vs. T MOBILE US | Visa vs. T Mobile | Visa vs. Cairo Communication SpA |
| American Express vs. FORMPIPE SOFTWARE AB | American Express vs. CVW CLEANTECH INC | American Express vs. MAGIC SOFTWARE ENTR | American Express vs. AEGEAN AIRLINES |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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