Correlation Between American Express and Blueriver Acquisition
Can any of the company-specific risk be diversified away by investing in both American Express and Blueriver Acquisition 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 Blueriver Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Blueriver Acquisition Corp, you can compare the effects of market volatilities on American Express and Blueriver Acquisition 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 Blueriver Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Blueriver Acquisition.
Diversification Opportunities for American Express and Blueriver Acquisition
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Blueriver is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Blueriver Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blueriver Acquisition 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 Blueriver Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blueriver Acquisition has no effect on the direction of American Express i.e., American Express and Blueriver Acquisition go up and down completely randomly.
Pair Corralation between American Express and Blueriver Acquisition
Considering the 90-day investment horizon American Express is expected to generate 4.65 times more return on investment than Blueriver Acquisition. However, American Express is 4.65 times more volatile than Blueriver Acquisition Corp. It trades about 0.17 of its potential returns per unit of risk. Blueriver Acquisition Corp is currently generating about -0.01 per unit of risk. If you would invest 16,644 in American Express on September 3, 2024 and sell it today you would earn a total of 13,582 from holding American Express or generate 81.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 80.97% |
| Values | Daily Returns |
American Express vs. Blueriver Acquisition Corp
Performance |
| Timeline |
| American Express |
| Blueriver Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Express and Blueriver Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Blueriver Acquisition
The main advantage of trading using opposite American Express and Blueriver Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Blueriver Acquisition 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 Blueriver Acquisition will offset losses from the drop in Blueriver Acquisition's long position.| American Express vs. Highway Holdings Limited | American Express vs. QCR Holdings | American Express vs. Partner Communications | American Express vs. Acumen Pharmaceuticals |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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