Correlation Between American Express and Ohio Variable
Can any of the company-specific risk be diversified away by investing in both American Express and Ohio Variable 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 Ohio Variable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Ohio Variable College, you can compare the effects of market volatilities on American Express and Ohio Variable 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 Ohio Variable. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Ohio Variable.
Diversification Opportunities for American Express and Ohio Variable
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Ohio is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Ohio Variable College in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ohio Variable College 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 Ohio Variable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ohio Variable College has no effect on the direction of American Express i.e., American Express and Ohio Variable go up and down completely randomly.
Pair Corralation between American Express and Ohio Variable
Considering the 90-day investment horizon American Express is expected to generate 2.52 times more return on investment than Ohio Variable. However, American Express is 2.52 times more volatile than Ohio Variable College. It trades about 0.17 of its potential returns per unit of risk. Ohio Variable College is currently generating about 0.13 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 13,824 from holding American Express or generate 83.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. Ohio Variable College
Performance |
| Timeline |
| American Express |
| Ohio Variable College |
American Express and Ohio Variable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Ohio Variable
The main advantage of trading using opposite American Express and Ohio Variable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Ohio Variable 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 Ohio Variable will offset losses from the drop in Ohio Variable's long position.| American Express vs. Highway Holdings Limited | American Express vs. QCR Holdings | American Express vs. Partner Communications | American Express vs. Acumen Pharmaceuticals |
| Ohio Variable vs. Vanguard Total Stock | Ohio Variable vs. Vanguard 500 Index | Ohio Variable vs. Vanguard Total Stock | Ohio Variable vs. Vanguard Total Stock |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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