Correlation Between American Express and Green Battery
Can any of the company-specific risk be diversified away by investing in both American Express and Green Battery 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 Green Battery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Green Battery Minerals, you can compare the effects of market volatilities on American Express and Green Battery 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 Green Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Green Battery.
Diversification Opportunities for American Express and Green Battery
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Green is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Green Battery Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Battery Minerals 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 Green Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Battery Minerals has no effect on the direction of American Express i.e., American Express and Green Battery go up and down completely randomly.
Pair Corralation between American Express and Green Battery
Considering the 90-day investment horizon American Express is expected to generate 0.11 times more return on investment than Green Battery. However, American Express is 9.45 times less risky than Green Battery. It trades about 0.13 of its potential returns per unit of risk. Green Battery Minerals is currently generating about 0.01 per unit of risk. If you would invest 29,297 in American Express on September 12, 2024 and sell it today you would earn a total of 914.00 from holding American Express or generate 3.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
American Express vs. Green Battery Minerals
Performance |
| Timeline |
| American Express |
| Green Battery Minerals |
American Express and Green Battery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Green Battery
The main advantage of trading using opposite American Express and Green Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Green Battery 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 Green Battery will offset losses from the drop in Green Battery's long position.| American Express vs. Victory Integrity Smallmid Cap | American Express vs. Hilton Worldwide Holdings | American Express vs. NVIDIA | American Express vs. JPMorgan Chase Co |
| Green Battery vs. Qubec Nickel Corp | Green Battery vs. IGO Limited | Green Battery vs. Focus Graphite | Green Battery vs. Mineral Res |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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