Correlation Between American Express and Grenke AG
Can any of the company-specific risk be diversified away by investing in both American Express and Grenke AG 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 Grenke AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Grenke AG, you can compare the effects of market volatilities on American Express and Grenke AG 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 Grenke AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Grenke AG.
Diversification Opportunities for American Express and Grenke AG
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Grenke is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Grenke AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grenke AG 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 are associated (or correlated) with Grenke AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grenke AG has no effect on the direction of American Express i.e., American Express and Grenke AG go up and down completely randomly.
Pair Corralation between American Express and Grenke AG
Assuming the 90 days trading horizon American Express is expected to generate 0.62 times more return on investment than Grenke AG. However, American Express is 1.62 times less risky than Grenke AG. It trades about 0.19 of its potential returns per unit of risk. Grenke AG is currently generating about -0.25 per unit of risk. If you would invest 27,340 in American Express on September 12, 2024 and sell it today you would earn a total of 1,435 from holding American Express or generate 5.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
American Express vs. Grenke AG
Performance |
| Timeline |
| American Express |
| Grenke AG |
American Express and Grenke AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Grenke AG
The main advantage of trading using opposite American Express and Grenke AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Grenke AG 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 Grenke AG will offset losses from the drop in Grenke AG's long position.| American Express vs. Evolution Mining Limited | American Express vs. Corsair Gaming | American Express vs. SALESFORCE INC CDR | American Express vs. SYSTEMAIR AB |
| Grenke AG vs. URBAN OUTFITTERS | Grenke AG vs. Consolidated Communications Holdings | Grenke AG vs. Ming Le Sports | Grenke AG vs. Playa Hotels Resorts |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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