Correlation Between American Express and Broad Capital
Can any of the company-specific risk be diversified away by investing in both American Express and Broad Capital 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 Broad Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Broad Capital Acquisition, you can compare the effects of market volatilities on American Express and Broad Capital 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 Broad Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Broad Capital.
Diversification Opportunities for American Express and Broad Capital
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Broad is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Broad Capital Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broad Capital 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 Broad Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broad Capital Acquisition has no effect on the direction of American Express i.e., American Express and Broad Capital go up and down completely randomly.
Pair Corralation between American Express and Broad Capital
If you would invest 27,240 in American Express on August 23, 2024 and sell it today you would earn a total of 2,060 from holding American Express or generate 7.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. Broad Capital Acquisition
Performance |
| Timeline |
| American Express |
| Broad Capital Acquisition |
American Express and Broad Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Broad Capital
The main advantage of trading using opposite American Express and Broad Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Broad Capital 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 Broad Capital will offset losses from the drop in Broad Capital's long position.| American Express vs. Small Cap Core | American Express vs. Morningstar Unconstrained Allocation | American Express vs. Mutual Of America | American Express vs. Ep Emerging Markets |
| Broad Capital vs. Finnovate Acquisition Corp | Broad Capital vs. Welsbach Technology Metals | Broad Capital vs. Healthcare AI Acquisition | Broad Capital vs. Metal Sky Star |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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