Correlation Between American Express and Entera Bio
Can any of the company-specific risk be diversified away by investing in both American Express and Entera Bio 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 Entera Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Entera Bio, you can compare the effects of market volatilities on American Express and Entera Bio 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 Entera Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Entera Bio.
Diversification Opportunities for American Express and Entera Bio
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and Entera is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Entera Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entera Bio 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 Entera Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entera Bio has no effect on the direction of American Express i.e., American Express and Entera Bio go up and down completely randomly.
Pair Corralation between American Express and Entera Bio
If you would invest 26,998 in American Express on August 25, 2024 and sell it today you would earn a total of 3,132 from holding American Express or generate 11.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
American Express vs. Entera Bio
Performance |
| Timeline |
| American Express |
| Entera Bio |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Express and Entera Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Entera Bio
The main advantage of trading using opposite American Express and Entera Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Entera Bio 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 Entera Bio will offset losses from the drop in Entera Bio's long position.| American Express vs. Visa Class A | American Express vs. Mastercard | American Express vs. SoFi Technologies | American Express vs. Coca Cola Consolidated |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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