Correlation Between American Express and Alger ETF
Can any of the company-specific risk be diversified away by investing in both American Express and Alger ETF 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 Alger ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and The Alger ETF, you can compare the effects of market volatilities on American Express and Alger ETF 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 Alger ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Alger ETF.
Diversification Opportunities for American Express and Alger ETF
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between American and Alger is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding American Express and The Alger ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger ETF 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 Alger ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger ETF has no effect on the direction of American Express i.e., American Express and Alger ETF go up and down completely randomly.
Pair Corralation between American Express and Alger ETF
Considering the 90-day investment horizon American Express is expected to generate 1.0 times more return on investment than Alger ETF. However, American Express is 1.0 times less risky than Alger ETF. It trades about 0.15 of its potential returns per unit of risk. The Alger ETF is currently generating about 0.11 per unit of risk. If you would invest 17,899 in American Express on November 9, 2024 and sell it today you would earn a total of 14,116 from holding American Express or generate 78.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 79.4% |
| Values | Daily Returns |
American Express vs. The Alger ETF
Performance |
| Timeline |
| American Express |
| Alger ETF |
American Express and Alger ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Alger ETF
The main advantage of trading using opposite American Express and Alger ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Alger ETF 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 Alger ETF will offset losses from the drop in Alger ETF's long position.| American Express vs. Visa Class A | American Express vs. Great Western Minerals | American Express vs. Enterprise Bancorp | American Express vs. T Rowe Price |
| Alger ETF vs. Freedom Day Dividend | Alger ETF vs. Franklin Templeton ETF | Alger ETF vs. iShares MSCI China | Alger ETF vs. Tidal Trust II |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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