Correlation Between Agrometal SAI and American Express
Can any of the company-specific risk be diversified away by investing in both Agrometal SAI 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 Agrometal SAI and American Express into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agrometal SAI and American Express Co, you can compare the effects of market volatilities on Agrometal SAI 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 Agrometal SAI with a short position of American Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agrometal SAI and American Express.
Diversification Opportunities for Agrometal SAI and American Express
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Agrometal and American is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Agrometal SAI and American Express Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express and Agrometal SAI 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 Agrometal SAI 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 Agrometal SAI i.e., Agrometal SAI and American Express go up and down completely randomly.
Pair Corralation between Agrometal SAI and American Express
Assuming the 90 days trading horizon Agrometal SAI is expected to generate 1.07 times less return on investment than American Express. In addition to that, Agrometal SAI is 2.49 times more volatile than American Express Co. It trades about 0.06 of its total potential returns per unit of risk. American Express Co is currently generating about 0.17 per unit of volatility. If you would invest 350,200 in American Express Co on August 28, 2024 and sell it today you would earn a total of 1,904,800 from holding American Express Co or generate 543.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agrometal SAI vs. American Express Co
Performance |
| Timeline |
| Agrometal SAI |
| American Express |
Agrometal SAI and American Express Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agrometal SAI and American Express
The main advantage of trading using opposite Agrometal SAI and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agrometal SAI 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.| Agrometal SAI vs. United States Steel | Agrometal SAI vs. Pfizer Inc | Agrometal SAI vs. Distribuidora de Gas | Agrometal SAI vs. IRSA Propiedades Comerciales |
| American Express vs. Pampa Energia SA | American Express vs. United States Steel | American Express vs. Pfizer Inc | American Express vs. Distribuidora de Gas |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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