Correlation Between American Express and Inflation-adjusted
Can any of the company-specific risk be diversified away by investing in both American Express and Inflation-adjusted 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 Inflation-adjusted into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Inflation Adjusted Bond Fund, you can compare the effects of market volatilities on American Express and Inflation-adjusted 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 Inflation-adjusted. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Inflation-adjusted.
Diversification Opportunities for American Express and Inflation-adjusted
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between American and Inflation-adjusted is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Inflation Adjusted Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflation Adjusted Bond 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 Inflation-adjusted. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflation Adjusted Bond has no effect on the direction of American Express i.e., American Express and Inflation-adjusted go up and down completely randomly.
Pair Corralation between American Express and Inflation-adjusted
Considering the 90-day investment horizon American Express is expected to under-perform the Inflation-adjusted. In addition to that, American Express is 4.71 times more volatile than Inflation Adjusted Bond Fund. It trades about -0.31 of its total potential returns per unit of risk. Inflation Adjusted Bond Fund is currently generating about 0.25 per unit of volatility. If you would invest 1,046 in Inflation Adjusted Bond Fund on November 27, 2024 and sell it today you would earn a total of 12.00 from holding Inflation Adjusted Bond Fund or generate 1.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. Inflation Adjusted Bond Fund
Performance |
| Timeline |
| American Express |
| Inflation Adjusted Bond |
American Express and Inflation-adjusted Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Inflation-adjusted
The main advantage of trading using opposite American Express and Inflation-adjusted positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Inflation-adjusted 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 Inflation-adjusted will offset losses from the drop in Inflation-adjusted'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 |
| Inflation-adjusted vs. Massmutual Premier Diversified | Inflation-adjusted vs. Diversified Real Asset | Inflation-adjusted vs. Principal Lifetime Hybrid | Inflation-adjusted vs. Western Asset Diversified |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |