Correlation Between Analog Devices and AMERICAN
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By analyzing existing cross correlation between Analog Devices and AMERICAN EXPRESS CR, you can compare the effects of market volatilities on Analog Devices and AMERICAN 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 Analog Devices with a short position of AMERICAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Analog Devices and AMERICAN.
Diversification Opportunities for Analog Devices and AMERICAN
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Analog and AMERICAN is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Analog Devices and AMERICAN EXPRESS CR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMERICAN EXPRESS and Analog Devices 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 Analog Devices are associated (or correlated) with AMERICAN. 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 Analog Devices i.e., Analog Devices and AMERICAN go up and down completely randomly.
Pair Corralation between Analog Devices and AMERICAN
Considering the 90-day investment horizon Analog Devices is expected to generate 4.45 times more return on investment than AMERICAN. However, Analog Devices is 4.45 times more volatile than AMERICAN EXPRESS CR. It trades about 0.05 of its potential returns per unit of risk. AMERICAN EXPRESS CR is currently generating about 0.03 per unit of risk. If you would invest 18,251 in Analog Devices on September 3, 2024 and sell it today you would earn a total of 4,061 from holding Analog Devices or generate 22.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.36% |
| Values | Daily Returns |
Analog Devices vs. AMERICAN EXPRESS CR
Performance |
| Timeline |
| Analog Devices |
| AMERICAN EXPRESS |
Analog Devices and AMERICAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Analog Devices and AMERICAN
The main advantage of trading using opposite Analog Devices and AMERICAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Analog Devices position performs unexpectedly, AMERICAN 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 will offset losses from the drop in AMERICAN's long position.| Analog Devices vs. Silicon Motion Technology | Analog Devices vs. ASE Industrial Holding | Analog Devices vs. SemiLEDS | Analog Devices vs. Advanced Micro Devices |
| AMERICAN vs. AEP TEX INC | AMERICAN vs. US BANK NATIONAL | AMERICAN vs. Jackson Financial | AMERICAN vs. MetLife |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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