Correlation Between American Express and Greenlite Ventures
Can any of the company-specific risk be diversified away by investing in both American Express and Greenlite Ventures 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 Greenlite Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Greenlite Ventures, you can compare the effects of market volatilities on American Express and Greenlite Ventures 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 Greenlite Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Greenlite Ventures.
Diversification Opportunities for American Express and Greenlite Ventures
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Greenlite is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Greenlite Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenlite Ventures 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 Greenlite Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenlite Ventures has no effect on the direction of American Express i.e., American Express and Greenlite Ventures go up and down completely randomly.
Pair Corralation between American Express and Greenlite Ventures
Considering the 90-day investment horizon American Express is expected to generate 0.14 times more return on investment than Greenlite Ventures. However, American Express is 7.04 times less risky than Greenlite Ventures. It trades about 0.28 of its potential returns per unit of risk. Greenlite Ventures is currently generating about -0.26 per unit of risk. If you would invest 27,019 in American Express on September 4, 2024 and sell it today you would earn a total of 3,207 from holding American Express or generate 11.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. Greenlite Ventures
Performance |
| Timeline |
| American Express |
| Greenlite Ventures |
American Express and Greenlite Ventures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Greenlite Ventures
The main advantage of trading using opposite American Express and Greenlite Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Greenlite Ventures 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 Greenlite Ventures will offset losses from the drop in Greenlite Ventures' long position.| American Express vs. 360 Finance | American Express vs. Atlanticus Holdings | American Express vs. Qudian Inc | American Express vs. Enova International |
| Greenlite Ventures vs. Huaizhong Health Group | Greenlite Ventures vs. Trimax Corp | Greenlite Ventures vs. Church Crawford | Greenlite Ventures vs. Atlantic Energy Solutions |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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