Correlation Between American Express and Camtek
Can any of the company-specific risk be diversified away by investing in both American Express and Camtek 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 Camtek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Camtek, you can compare the effects of market volatilities on American Express and Camtek 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 Camtek. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Camtek.
Diversification Opportunities for American Express and Camtek
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Camtek is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Camtek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camtek 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 Camtek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camtek has no effect on the direction of American Express i.e., American Express and Camtek go up and down completely randomly.
Pair Corralation between American Express and Camtek
Considering the 90-day investment horizon American Express is expected to generate 1.9 times less return on investment than Camtek. But when comparing it to its historical volatility, American Express is 2.06 times less risky than Camtek. It trades about 0.1 of its potential returns per unit of risk. Camtek is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,363 in Camtek on August 24, 2024 and sell it today you would earn a total of 5,131 from holding Camtek or generate 217.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. Camtek
Performance |
| Timeline |
| American Express |
| Camtek |
American Express and Camtek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Camtek
The main advantage of trading using opposite American Express and Camtek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Camtek 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 Camtek will offset losses from the drop in Camtek's long position.| American Express vs. Visa Class A | American Express vs. Mastercard | American Express vs. SoFi Technologies | American Express vs. Coca Cola Consolidated |
| Camtek vs. Amtech Systems | Camtek vs. Veeco Instruments | Camtek vs. Ichor Holdings | Camtek vs. Axcelis Technologies |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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