Correlation Between American Express and IShares USD
Can any of the company-specific risk be diversified away by investing in both American Express and IShares USD 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 IShares USD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and iShares USD Green, you can compare the effects of market volatilities on American Express and IShares USD 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 IShares USD. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and IShares USD.
Diversification Opportunities for American Express and IShares USD
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and IShares is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding American Express and iShares USD Green in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares USD Green 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 IShares USD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares USD Green has no effect on the direction of American Express i.e., American Express and IShares USD go up and down completely randomly.
Pair Corralation between American Express and IShares USD
Considering the 90-day investment horizon American Express is expected to generate 4.65 times more return on investment than IShares USD. However, American Express is 4.65 times more volatile than iShares USD Green. It trades about 0.1 of its potential returns per unit of risk. iShares USD Green is currently generating about 0.05 per unit of risk. If you would invest 14,986 in American Express on August 30, 2024 and sell it today you would earn a total of 15,439 from holding American Express or generate 103.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. iShares USD Green
Performance |
| Timeline |
| American Express |
| iShares USD Green |
American Express and IShares USD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and IShares USD
The main advantage of trading using opposite American Express and IShares USD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, IShares USD 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 IShares USD will offset losses from the drop in IShares USD's long position.| American Express vs. Visa Class A | American Express vs. Mastercard | American Express vs. Discover Financial Services |
| IShares USD vs. iShares ESG USD | IShares USD vs. iShares ESG 1 5 | IShares USD vs. iShares ESG Aggregate | IShares USD vs. iShares ESG Aware |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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