Correlation Between American Express and Evolution Mining
Can any of the company-specific risk be diversified away by investing in both American Express and Evolution Mining 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 Evolution Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Evolution Mining Limited, you can compare the effects of market volatilities on American Express and Evolution Mining 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 Evolution Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Evolution Mining.
Diversification Opportunities for American Express and Evolution Mining
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and Evolution is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Evolution Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Mining 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 Evolution Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Mining has no effect on the direction of American Express i.e., American Express and Evolution Mining go up and down completely randomly.
Pair Corralation between American Express and Evolution Mining
Assuming the 90 days trading horizon American Express is expected to generate 0.62 times more return on investment than Evolution Mining. However, American Express is 1.61 times less risky than Evolution Mining. It trades about 0.1 of its potential returns per unit of risk. Evolution Mining Limited is currently generating about 0.05 per unit of risk. If you would invest 13,402 in American Express on September 12, 2024 and sell it today you would earn a total of 15,373 from holding American Express or generate 114.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. Evolution Mining Limited
Performance |
| Timeline |
| American Express |
| Evolution Mining |
American Express and Evolution Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Evolution Mining
The main advantage of trading using opposite American Express and Evolution Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Evolution Mining 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 Evolution Mining will offset losses from the drop in Evolution Mining'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 |
| Evolution Mining vs. Franco Nevada | Evolution Mining vs. Superior Plus Corp | Evolution Mining vs. SIVERS SEMICONDUCTORS AB | Evolution Mining vs. Norsk Hydro ASA |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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