Correlation Between American Express and CaliberCos
Can any of the company-specific risk be diversified away by investing in both American Express and CaliberCos 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 CaliberCos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and CaliberCos Class A, you can compare the effects of market volatilities on American Express and CaliberCos 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 CaliberCos. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and CaliberCos.
Diversification Opportunities for American Express and CaliberCos
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and CaliberCos is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding American Express and CaliberCos Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CaliberCos Class A 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 CaliberCos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CaliberCos Class A has no effect on the direction of American Express i.e., American Express and CaliberCos go up and down completely randomly.
Pair Corralation between American Express and CaliberCos
Considering the 90-day investment horizon American Express is expected to generate 0.25 times more return on investment than CaliberCos. However, American Express is 4.05 times less risky than CaliberCos. It trades about 0.18 of its potential returns per unit of risk. CaliberCos Class A is currently generating about -0.02 per unit of risk. If you would invest 25,449 in American Express on September 12, 2024 and sell it today you would earn a total of 4,797 from holding American Express or generate 18.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. CaliberCos Class A
Performance |
| Timeline |
| American Express |
| CaliberCos Class A |
American Express and CaliberCos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and CaliberCos
The main advantage of trading using opposite American Express and CaliberCos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, CaliberCos 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 CaliberCos will offset losses from the drop in CaliberCos' long position.| American Express vs. Visa Class A | American Express vs. PayPal Holdings | American Express vs. Capital One Financial | American Express vs. Upstart Holdings |
| CaliberCos vs. Contagious Gaming | CaliberCos vs. Newpark Resources | CaliberCos vs. Tritent International Agriculture | CaliberCos vs. Tyson Foods |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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