Correlation Between American Express and TrimTabs Donoghue
Can any of the company-specific risk be diversified away by investing in both American Express and TrimTabs Donoghue 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 TrimTabs Donoghue into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and TrimTabs Donoghue Forlines, you can compare the effects of market volatilities on American Express and TrimTabs Donoghue 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 TrimTabs Donoghue. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and TrimTabs Donoghue.
Diversification Opportunities for American Express and TrimTabs Donoghue
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and TrimTabs is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding American Express and TrimTabs Donoghue Forlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TrimTabs Donoghue 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 TrimTabs Donoghue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TrimTabs Donoghue has no effect on the direction of American Express i.e., American Express and TrimTabs Donoghue go up and down completely randomly.
Pair Corralation between American Express and TrimTabs Donoghue
Considering the 90-day investment horizon American Express is expected to generate 1.86 times more return on investment than TrimTabs Donoghue. However, American Express is 1.86 times more volatile than TrimTabs Donoghue Forlines. It trades about 0.29 of its potential returns per unit of risk. TrimTabs Donoghue Forlines is currently generating about 0.4 per unit of risk. If you would invest 27,019 in American Express on September 3, 2024 and sell it today you would earn a total of 3,207 from holding American Express or generate 11.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. TrimTabs Donoghue Forlines
Performance |
| Timeline |
| American Express |
| TrimTabs Donoghue |
American Express and TrimTabs Donoghue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and TrimTabs Donoghue
The main advantage of trading using opposite American Express and TrimTabs Donoghue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, TrimTabs Donoghue 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 TrimTabs Donoghue will offset losses from the drop in TrimTabs Donoghue's long position.| American Express vs. Highway Holdings Limited | American Express vs. QCR Holdings | American Express vs. Partner Communications | American Express vs. Acumen Pharmaceuticals |
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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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