Correlation Between American Express and Virtus Allianzgi
Can any of the company-specific risk be diversified away by investing in both American Express and Virtus Allianzgi 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 Virtus Allianzgi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Virtus Allianzgi Artificial, you can compare the effects of market volatilities on American Express and Virtus Allianzgi 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 Virtus Allianzgi. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Virtus Allianzgi.
Diversification Opportunities for American Express and Virtus Allianzgi
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Virtus is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Virtus Allianzgi Artificial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Allianzgi Art 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 Virtus Allianzgi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Allianzgi Art has no effect on the direction of American Express i.e., American Express and Virtus Allianzgi go up and down completely randomly.
Pair Corralation between American Express and Virtus Allianzgi
Considering the 90-day investment horizon American Express is expected to generate 1.29 times more return on investment than Virtus Allianzgi. However, American Express is 1.29 times more volatile than Virtus Allianzgi Artificial. It trades about 0.0 of its potential returns per unit of risk. Virtus Allianzgi Artificial is currently generating about -0.08 per unit of risk. If you would invest 25,558 in American Express on January 12, 2025 and sell it today you would lose (445.00) from holding American Express or give up 1.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. Virtus Allianzgi Artificial
Performance |
| Timeline |
| American Express |
| Virtus Allianzgi Art |
American Express and Virtus Allianzgi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Virtus Allianzgi
The main advantage of trading using opposite American Express and Virtus Allianzgi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Virtus Allianzgi 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 Virtus Allianzgi will offset losses from the drop in Virtus Allianzgi'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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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