Correlation Between American Express and ASA Gold
Can any of the company-specific risk be diversified away by investing in both American Express and ASA Gold 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 ASA Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and ASA Gold and, you can compare the effects of market volatilities on American Express and ASA Gold 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 ASA Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and ASA Gold.
Diversification Opportunities for American Express and ASA Gold
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and ASA is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding American Express and ASA Gold and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASA Gold 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 ASA Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASA Gold has no effect on the direction of American Express i.e., American Express and ASA Gold go up and down completely randomly.
Pair Corralation between American Express and ASA Gold
Considering the 90-day investment horizon American Express is expected to generate 0.85 times more return on investment than ASA Gold. However, American Express is 1.17 times less risky than ASA Gold. It trades about 0.13 of its potential returns per unit of risk. ASA Gold and is currently generating about 0.05 per unit of risk. If you would invest 15,497 in American Express on September 19, 2024 and sell it today you would earn a total of 14,637 from holding American Express or generate 94.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. ASA Gold and
Performance |
| Timeline |
| American Express |
| ASA Gold |
American Express and ASA Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and ASA Gold
The main advantage of trading using opposite American Express and ASA Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, ASA Gold 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 ASA Gold will offset losses from the drop in ASA Gold's long position.| American Express vs. Visa Class A | American Express vs. PayPal Holdings | American Express vs. Mastercard |
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 Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |