Correlation Between American Express and Dycasa SA
Can any of the company-specific risk be diversified away by investing in both American Express and Dycasa SA 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 Dycasa SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express Co and Dycasa SA, you can compare the effects of market volatilities on American Express and Dycasa SA 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 Dycasa SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Dycasa SA.
Diversification Opportunities for American Express and Dycasa SA
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and Dycasa is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding American Express Co and Dycasa SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dycasa SA 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 Co are associated (or correlated) with Dycasa SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dycasa SA has no effect on the direction of American Express i.e., American Express and Dycasa SA go up and down completely randomly.
Pair Corralation between American Express and Dycasa SA
Assuming the 90 days trading horizon American Express is expected to generate 2.81 times less return on investment than Dycasa SA. But when comparing it to its historical volatility, American Express Co is 2.36 times less risky than Dycasa SA. It trades about 0.17 of its potential returns per unit of risk. Dycasa SA is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 82,800 in Dycasa SA on August 26, 2024 and sell it today you would earn a total of 16,500 from holding Dycasa SA or generate 19.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express Co vs. Dycasa SA
Performance |
| Timeline |
| American Express |
| Dycasa SA |
American Express and Dycasa SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Dycasa SA
The main advantage of trading using opposite American Express and Dycasa SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Dycasa SA 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 Dycasa SA will offset losses from the drop in Dycasa SA's long position.| American Express vs. Harmony Gold Mining | American Express vs. Transportadora de Gas | American Express vs. Agrometal SAI | American Express vs. United States Steel |
| Dycasa SA vs. Transportadora de Gas | Dycasa SA vs. Harmony Gold Mining | Dycasa SA vs. United States Steel | Dycasa SA vs. Compania de Transporte |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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