Correlation Between American Express and CHKEZ Old
Can any of the company-specific risk be diversified away by investing in both American Express and CHKEZ Old 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 CHKEZ Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and CHKEZ Old, you can compare the effects of market volatilities on American Express and CHKEZ Old 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 CHKEZ Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and CHKEZ Old.
Diversification Opportunities for American Express and CHKEZ Old
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and CHKEZ is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding American Express and CHKEZ Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHKEZ Old 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 CHKEZ Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHKEZ Old has no effect on the direction of American Express i.e., American Express and CHKEZ Old go up and down completely randomly.
Pair Corralation between American Express and CHKEZ Old
If you would invest 30,275 in American Express on October 25, 2024 and sell it today you would earn a total of 1,950 from holding American Express or generate 6.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 5.56% |
| Values | Daily Returns |
American Express vs. CHKEZ Old
Performance |
| Timeline |
| American Express |
| CHKEZ Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Express and CHKEZ Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and CHKEZ Old
The main advantage of trading using opposite American Express and CHKEZ Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, CHKEZ Old 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 CHKEZ Old will offset losses from the drop in CHKEZ Old's long position.| American Express vs. Bank of America | American Express vs. RLJ Lodging Trust | American Express vs. PennyMac Finl Svcs | American Express vs. Newhydrogen |
| CHKEZ Old vs. Magnite | CHKEZ Old vs. Interpublic Group of | CHKEZ Old vs. Townsquare Media | CHKEZ Old vs. Coupang LLC |
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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