Correlation Between AbraSilver Resource and AMERICAN EXPRESS
Can any of the company-specific risk be diversified away by investing in both AbraSilver Resource and AMERICAN EXPRESS 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 AbraSilver Resource and AMERICAN EXPRESS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AbraSilver Resource Corp and AMERICAN EXPRESS CDR, you can compare the effects of market volatilities on AbraSilver Resource 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 AbraSilver Resource with a short position of AMERICAN EXPRESS. Check out your portfolio center. Please also check ongoing floating volatility patterns of AbraSilver Resource and AMERICAN EXPRESS.
Diversification Opportunities for AbraSilver Resource and AMERICAN EXPRESS
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AbraSilver and AMERICAN is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding AbraSilver Resource Corp and AMERICAN EXPRESS CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMERICAN EXPRESS CDR and AbraSilver Resource 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 AbraSilver Resource Corp 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 CDR has no effect on the direction of AbraSilver Resource i.e., AbraSilver Resource and AMERICAN EXPRESS go up and down completely randomly.
Pair Corralation between AbraSilver Resource and AMERICAN EXPRESS
Assuming the 90 days trading horizon AbraSilver Resource Corp is expected to under-perform the AMERICAN EXPRESS. In addition to that, AbraSilver Resource is 1.54 times more volatile than AMERICAN EXPRESS CDR. It trades about -0.15 of its total potential returns per unit of risk. AMERICAN EXPRESS CDR is currently generating about 0.22 per unit of volatility. If you would invest 2,408 in AMERICAN EXPRESS CDR on September 2, 2024 and sell it today you would earn a total of 276.00 from holding AMERICAN EXPRESS CDR or generate 11.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AbraSilver Resource Corp vs. AMERICAN EXPRESS CDR
Performance |
| Timeline |
| AbraSilver Resource Corp |
| AMERICAN EXPRESS CDR |
AbraSilver Resource and AMERICAN EXPRESS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AbraSilver Resource and AMERICAN EXPRESS
The main advantage of trading using opposite AbraSilver Resource and AMERICAN EXPRESS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AbraSilver Resource 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's long position.| AbraSilver Resource vs. Defiance Silver Corp | AbraSilver Resource vs. Santacruz Silv | AbraSilver Resource vs. Guanajuato Silver | AbraSilver Resource vs. Aftermath Silver |
| AMERICAN EXPRESS vs. Birchtech Corp | AMERICAN EXPRESS vs. Dream Industrial Real | AMERICAN EXPRESS vs. Electra Battery Materials | AMERICAN EXPRESS vs. Metalero Mining Corp |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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