Correlation Between American Express and Beyond Minerals
Can any of the company-specific risk be diversified away by investing in both American Express and Beyond Minerals 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 Beyond Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Beyond Minerals, you can compare the effects of market volatilities on American Express and Beyond Minerals 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 Beyond Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Beyond Minerals.
Diversification Opportunities for American Express and Beyond Minerals
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and Beyond is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Beyond Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beyond Minerals 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 Beyond Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beyond Minerals has no effect on the direction of American Express i.e., American Express and Beyond Minerals go up and down completely randomly.
Pair Corralation between American Express and Beyond Minerals
Considering the 90-day investment horizon American Express is expected to generate 21.47 times less return on investment than Beyond Minerals. But when comparing it to its historical volatility, American Express is 8.15 times less risky than Beyond Minerals. It trades about 0.03 of its potential returns per unit of risk. Beyond Minerals is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2.31 in Beyond Minerals on November 30, 2024 and sell it today you would earn a total of 0.37 from holding Beyond Minerals or generate 16.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
American Express vs. Beyond Minerals
Performance |
| Timeline |
| American Express |
| Beyond Minerals |
American Express and Beyond Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Beyond Minerals
The main advantage of trading using opposite American Express and Beyond Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Beyond Minerals 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 Beyond Minerals will offset losses from the drop in Beyond Minerals' long position.| American Express vs. Visa Class A | American Express vs. PayPal Holdings | American Express vs. Capital One Financial | American Express vs. Upstart Holdings |
| Beyond Minerals vs. Winsome Resources Limited | Beyond Minerals vs. IGO Limited | Beyond Minerals vs. Qubec Nickel Corp | Beyond Minerals vs. IGO Limited |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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