Correlation Between American Express and Blackrock Floating
Can any of the company-specific risk be diversified away by investing in both American Express and Blackrock Floating 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 Blackrock Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Blackrock Floating Rate, you can compare the effects of market volatilities on American Express and Blackrock Floating 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 Blackrock Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Blackrock Floating.
Diversification Opportunities for American Express and Blackrock Floating
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Blackrock is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Blackrock Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Floating Rate 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 Blackrock Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Floating Rate has no effect on the direction of American Express i.e., American Express and Blackrock Floating go up and down completely randomly.
Pair Corralation between American Express and Blackrock Floating
Considering the 90-day investment horizon American Express is expected to generate 2.88 times more return on investment than Blackrock Floating. However, American Express is 2.88 times more volatile than Blackrock Floating Rate. It trades about 0.17 of its potential returns per unit of risk. Blackrock Floating Rate is currently generating about 0.28 per unit of risk. If you would invest 27,035 in American Express on August 28, 2024 and sell it today you would earn a total of 3,486 from holding American Express or generate 12.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.67% |
| Values | Daily Returns |
American Express vs. Blackrock Floating Rate
Performance |
| Timeline |
| American Express |
| Blackrock Floating Rate |
American Express and Blackrock Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Blackrock Floating
The main advantage of trading using opposite American Express and Blackrock Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Blackrock Floating 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 Blackrock Floating will offset losses from the drop in Blackrock Floating's long position.| American Express vs. Orix Corp Ads | American Express vs. Medallion Financial Corp | American Express vs. Oportun Financial Corp | American Express vs. SLM Corp Pb |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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