Correlation Between American Express and Freedom Acquisition
Can any of the company-specific risk be diversified away by investing in both American Express and Freedom Acquisition 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 Freedom Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Freedom Acquisition I, you can compare the effects of market volatilities on American Express and Freedom Acquisition 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 Freedom Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Freedom Acquisition.
Diversification Opportunities for American Express and Freedom Acquisition
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Freedom is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Freedom Acquisition I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freedom Acquisition 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 Freedom Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freedom Acquisition has no effect on the direction of American Express i.e., American Express and Freedom Acquisition go up and down completely randomly.
Pair Corralation between American Express and Freedom Acquisition
If you would invest 15,532 in American Express on September 3, 2024 and sell it today you would earn a total of 14,694 from holding American Express or generate 94.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.32% |
| Values | Daily Returns |
American Express vs. Freedom Acquisition I
Performance |
| Timeline |
| American Express |
| Freedom Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Express and Freedom Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Freedom Acquisition
The main advantage of trading using opposite American Express and Freedom Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Freedom Acquisition 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 Freedom Acquisition will offset losses from the drop in Freedom Acquisition's long position.| American Express vs. Highway Holdings Limited | American Express vs. QCR Holdings | American Express vs. Partner Communications | American Express vs. Acumen Pharmaceuticals |
| Freedom Acquisition vs. Everest Consolidator Acquisition | Freedom Acquisition vs. Valuence Merger Corp |
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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