Correlation Between American Express and AbraSilver Resource
Can any of the company-specific risk be diversified away by investing in both American Express and AbraSilver Resource 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 AbraSilver Resource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and AbraSilver Resource Corp, you can compare the effects of market volatilities on American Express and AbraSilver Resource 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 AbraSilver Resource. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and AbraSilver Resource.
Diversification Opportunities for American Express and AbraSilver Resource
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and AbraSilver is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding American Express and AbraSilver Resource Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AbraSilver Resource Corp 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 AbraSilver Resource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AbraSilver Resource Corp has no effect on the direction of American Express i.e., American Express and AbraSilver Resource go up and down completely randomly.
Pair Corralation between American Express and AbraSilver Resource
Considering the 90-day investment horizon American Express is expected to generate 0.45 times more return on investment than AbraSilver Resource. However, American Express is 2.23 times less risky than AbraSilver Resource. It trades about 0.23 of its potential returns per unit of risk. AbraSilver Resource Corp is currently generating about 0.04 per unit of risk. If you would invest 29,773 in American Express on November 2, 2024 and sell it today you would earn a total of 2,032 from holding American Express or generate 6.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
American Express vs. AbraSilver Resource Corp
Performance |
| Timeline |
| American Express |
| AbraSilver Resource Corp |
American Express and AbraSilver Resource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and AbraSilver Resource
The main advantage of trading using opposite American Express and AbraSilver Resource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, AbraSilver Resource 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 AbraSilver Resource will offset losses from the drop in AbraSilver Resource's long position.| American Express vs. Visa Class A | American Express vs. PayPal Holdings | American Express vs. Capital One Financial | American Express vs. Upstart Holdings |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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