Correlation Between American Express and Fidelity MSCI
Can any of the company-specific risk be diversified away by investing in both American Express and Fidelity MSCI 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 Fidelity MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Fidelity MSCI Real, you can compare the effects of market volatilities on American Express and Fidelity MSCI 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 Fidelity MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Fidelity MSCI.
Diversification Opportunities for American Express and Fidelity MSCI
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and Fidelity is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Fidelity MSCI Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity MSCI Real 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 Fidelity MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity MSCI Real has no effect on the direction of American Express i.e., American Express and Fidelity MSCI go up and down completely randomly.
Pair Corralation between American Express and Fidelity MSCI
Considering the 90-day investment horizon American Express is expected to generate 1.33 times more return on investment than Fidelity MSCI. However, American Express is 1.33 times more volatile than Fidelity MSCI Real. It trades about 0.09 of its potential returns per unit of risk. Fidelity MSCI Real is currently generating about 0.02 per unit of risk. If you would invest 17,647 in American Express on November 5, 2024 and sell it today you would earn a total of 14,098 from holding American Express or generate 79.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
American Express vs. Fidelity MSCI Real
Performance |
| Timeline |
| American Express |
| Fidelity MSCI Real |
American Express and Fidelity MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Fidelity MSCI
The main advantage of trading using opposite American Express and Fidelity MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Fidelity MSCI 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 Fidelity MSCI will offset losses from the drop in Fidelity MSCI's long position.| American Express vs. 360 Finance | American Express vs. Atlanticus Holdings | American Express vs. Qudian Inc | American Express vs. Enova International |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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