Correlation Between American Express and Harbor Dividend
Can any of the company-specific risk be diversified away by investing in both American Express and Harbor Dividend 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 Harbor Dividend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Harbor Dividend Growth, you can compare the effects of market volatilities on American Express and Harbor Dividend 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 Harbor Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Harbor Dividend.
Diversification Opportunities for American Express and Harbor Dividend
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Harbor is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Harbor Dividend Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor Dividend Growth 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 Harbor Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor Dividend Growth has no effect on the direction of American Express i.e., American Express and Harbor Dividend go up and down completely randomly.
Pair Corralation between American Express and Harbor Dividend
Considering the 90-day investment horizon American Express is expected to generate 2.13 times more return on investment than Harbor Dividend. However, American Express is 2.13 times more volatile than Harbor Dividend Growth. It trades about 0.28 of its potential returns per unit of risk. Harbor Dividend Growth is currently generating about 0.05 per unit of risk. If you would invest 27,043 in American Express on August 30, 2024 and sell it today you would earn a total of 3,382 from holding American Express or generate 12.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
American Express vs. Harbor Dividend Growth
Performance |
| Timeline |
| American Express |
| Harbor Dividend Growth |
American Express and Harbor Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Harbor Dividend
The main advantage of trading using opposite American Express and Harbor Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Harbor Dividend 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 Harbor Dividend will offset losses from the drop in Harbor Dividend's long position.| American Express vs. 360 Finance | American Express vs. Atlanticus Holdings | American Express vs. Qudian Inc | American Express vs. Enova International |
| Harbor Dividend vs. Harbor All Weather Inflation | Harbor Dividend vs. Harbor Corporate Culture | Harbor Dividend vs. iShares International Dividend | Harbor Dividend vs. Harbor Long Term Growers |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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