Correlation Between American Express and Associates First
Can any of the company-specific risk be diversified away by investing in both American Express and Associates First 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 Associates First into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Associates First Capital, you can compare the effects of market volatilities on American Express and Associates First 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 Associates First. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Associates First.
Diversification Opportunities for American Express and Associates First
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between American and Associates is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Associates First Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associates First Capital 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 Associates First. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associates First Capital has no effect on the direction of American Express i.e., American Express and Associates First go up and down completely randomly.
Pair Corralation between American Express and Associates First
If you would invest 27,147 in American Express on August 28, 2024 and sell it today you would earn a total of 3,410 from holding American Express or generate 12.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. Associates First Capital
Performance |
| Timeline |
| American Express |
| Associates First Capital |
American Express and Associates First Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Associates First
The main advantage of trading using opposite American Express and Associates First positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Associates First 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 Associates First will offset losses from the drop in Associates First's long position.| American Express vs. Orix Corp Ads | American Express vs. Medallion Financial Corp | American Express vs. Oportun Financial Corp | American Express vs. SLM Corp Pb |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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