Correlation Between Aluar Aluminio and American Express
Can any of the company-specific risk be diversified away by investing in both Aluar Aluminio 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 Aluar Aluminio and American Express into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aluar Aluminio Argentino and American Express Co, you can compare the effects of market volatilities on Aluar Aluminio 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 Aluar Aluminio with a short position of American Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluar Aluminio and American Express.
Diversification Opportunities for Aluar Aluminio and American Express
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aluar and American is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Aluar Aluminio Argentino and American Express Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express and Aluar Aluminio 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 Aluar Aluminio Argentino 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 Aluar Aluminio i.e., Aluar Aluminio and American Express go up and down completely randomly.
Pair Corralation between Aluar Aluminio and American Express
Assuming the 90 days trading horizon Aluar Aluminio is expected to generate 1.29 times less return on investment than American Express. In addition to that, Aluar Aluminio is 1.7 times more volatile than American Express Co. It trades about 0.07 of its total potential returns per unit of risk. American Express Co is currently generating about 0.15 per unit of volatility. If you would invest 775,750 in American Express Co on September 3, 2024 and sell it today you would earn a total of 1,436,750 from holding American Express Co or generate 185.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aluar Aluminio Argentino vs. American Express Co
Performance |
| Timeline |
| Aluar Aluminio Argentino |
| American Express |
Aluar Aluminio and American Express Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aluar Aluminio and American Express
The main advantage of trading using opposite Aluar Aluminio and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluar Aluminio 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.| Aluar Aluminio vs. Edesa Holding SA | Aluar Aluminio vs. Longvie SA | Aluar Aluminio vs. United States Steel | Aluar Aluminio vs. Capex SA |
| American Express vs. Edesa Holding SA | American Express vs. Longvie SA | American Express vs. United States Steel | American Express vs. Capex SA |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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