Correlation Between American Express and Credit Suisse
Can any of the company-specific risk be diversified away by investing in both American Express and Credit Suisse 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 Credit Suisse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Credit Suisse X Links, you can compare the effects of market volatilities on American Express and Credit Suisse 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 Credit Suisse. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Credit Suisse.
Diversification Opportunities for American Express and Credit Suisse
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and Credit is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Credit Suisse X Links in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Suisse X 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 Credit Suisse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Suisse X has no effect on the direction of American Express i.e., American Express and Credit Suisse go up and down completely randomly.
Pair Corralation between American Express and Credit Suisse
Considering the 90-day investment horizon American Express is expected to generate 1.73 times more return on investment than Credit Suisse. However, American Express is 1.73 times more volatile than Credit Suisse X Links. It trades about 0.28 of its potential returns per unit of risk. Credit Suisse X Links is currently generating about -0.09 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. Credit Suisse X Links
Performance |
| Timeline |
| American Express |
| Credit Suisse X |
American Express and Credit Suisse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Credit Suisse
The main advantage of trading using opposite American Express and Credit Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Credit Suisse 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 Credit Suisse will offset losses from the drop in Credit Suisse's long position.| American Express vs. 360 Finance | American Express vs. Atlanticus Holdings | American Express vs. X Financial Class | American Express vs. LendingClub Corp |
| Credit Suisse vs. Credit Suisse X Links | Credit Suisse vs. Credit Suisse X Links | Credit Suisse vs. Global X Alternative | Credit Suisse vs. Global X Russell |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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