Correlation Between American Express and Atlantic Wind
Can any of the company-specific risk be diversified away by investing in both American Express and Atlantic Wind 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 Atlantic Wind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Atlantic Wind Solar, you can compare the effects of market volatilities on American Express and Atlantic Wind 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 Atlantic Wind. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Atlantic Wind.
Diversification Opportunities for American Express and Atlantic Wind
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Atlantic is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Atlantic Wind Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantic Wind Solar 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 Atlantic Wind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantic Wind Solar has no effect on the direction of American Express i.e., American Express and Atlantic Wind go up and down completely randomly.
Pair Corralation between American Express and Atlantic Wind
Considering the 90-day investment horizon American Express is expected to generate 0.3 times more return on investment than Atlantic Wind. However, American Express is 3.38 times less risky than Atlantic Wind. It trades about 0.25 of its potential returns per unit of risk. Atlantic Wind Solar is currently generating about -0.1 per unit of risk. If you would invest 27,408 in American Express on August 31, 2024 and sell it today you would earn a total of 3,017 from holding American Express or generate 11.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. Atlantic Wind Solar
Performance |
| Timeline |
| American Express |
| Atlantic Wind Solar |
American Express and Atlantic Wind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Atlantic Wind
The main advantage of trading using opposite American Express and Atlantic Wind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Atlantic Wind 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 Atlantic Wind will offset losses from the drop in Atlantic Wind's long position.| American Express vs. Visa Class A | American Express vs. RLJ Lodging Trust | American Express vs. Aquagold International | American Express vs. Stepstone Group |
| Atlantic Wind vs. Green Stream Holdings | Atlantic Wind vs. VirExit Technologies | Atlantic Wind vs. Clean Vision Corp | Atlantic Wind vs. SolarWindow Technologies |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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