Correlation Between American Express and YieldMax ABNB
Can any of the company-specific risk be diversified away by investing in both American Express and YieldMax ABNB 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 YieldMax ABNB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and YieldMax ABNB Option, you can compare the effects of market volatilities on American Express and YieldMax ABNB 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 YieldMax ABNB. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and YieldMax ABNB.
Diversification Opportunities for American Express and YieldMax ABNB
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and YieldMax is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding American Express and YieldMax ABNB Option in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YieldMax ABNB Option 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 YieldMax ABNB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YieldMax ABNB Option has no effect on the direction of American Express i.e., American Express and YieldMax ABNB go up and down completely randomly.
Pair Corralation between American Express and YieldMax ABNB
Considering the 90-day investment horizon American Express is expected to generate 0.73 times more return on investment than YieldMax ABNB. However, American Express is 1.38 times less risky than YieldMax ABNB. It trades about 0.18 of its potential returns per unit of risk. YieldMax ABNB Option is currently generating about -0.06 per unit of risk. If you would invest 15,118 in American Express on September 1, 2024 and sell it today you would earn a total of 15,350 from holding American Express or generate 101.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 50.56% |
| Values | Daily Returns |
American Express vs. YieldMax ABNB Option
Performance |
| Timeline |
| American Express |
| YieldMax ABNB Option |
American Express and YieldMax ABNB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and YieldMax ABNB
The main advantage of trading using opposite American Express and YieldMax ABNB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, YieldMax ABNB 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 YieldMax ABNB will offset losses from the drop in YieldMax ABNB's long position.| American Express vs. 360 Finance | American Express vs. Atlanticus Holdings | American Express vs. Qudian Inc | American Express vs. Enova International |
| YieldMax ABNB vs. Global X SP | YieldMax ABNB vs. Amplify CWP Enhanced | YieldMax ABNB vs. JPMorgan Equity Premium |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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