Correlation Between American Express and Genocea Biosciences
Can any of the company-specific risk be diversified away by investing in both American Express and Genocea Biosciences 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 Genocea Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Genocea Biosciences, you can compare the effects of market volatilities on American Express and Genocea Biosciences 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 Genocea Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Genocea Biosciences.
Diversification Opportunities for American Express and Genocea Biosciences
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and Genocea is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Genocea Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genocea Biosciences 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 Genocea Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genocea Biosciences has no effect on the direction of American Express i.e., American Express and Genocea Biosciences go up and down completely randomly.
Pair Corralation between American Express and Genocea Biosciences
Considering the 90-day investment horizon American Express is expected to generate 531.76 times less return on investment than Genocea Biosciences. But when comparing it to its historical volatility, American Express is 175.85 times less risky than Genocea Biosciences. It trades about 0.1 of its potential returns per unit of risk. Genocea Biosciences is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Genocea Biosciences on September 3, 2024 and sell it today you would earn a total of 0.01 from holding Genocea Biosciences or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 6.53% |
| Values | Daily Returns |
American Express vs. Genocea Biosciences
Performance |
| Timeline |
| American Express |
| Genocea Biosciences |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Express and Genocea Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Genocea Biosciences
The main advantage of trading using opposite American Express and Genocea Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Genocea Biosciences 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 Genocea Biosciences will offset losses from the drop in Genocea Biosciences' long position.| American Express vs. Highway Holdings Limited | American Express vs. QCR Holdings | American Express vs. Partner Communications | American Express vs. Acumen Pharmaceuticals |
| Genocea Biosciences vs. Yum Brands | Genocea Biosciences vs. Oatly Group AB | Genocea Biosciences vs. Celsius Holdings | Genocea Biosciences vs. Vita Coco |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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