Correlation Between American Express and GSR II
Can any of the company-specific risk be diversified away by investing in both American Express and GSR II 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 GSR II into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and GSR II Meteora, you can compare the effects of market volatilities on American Express and GSR II 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 GSR II. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and GSR II.
Diversification Opportunities for American Express and GSR II
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and GSR is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding American Express and GSR II Meteora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GSR II Meteora 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 GSR II. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GSR II Meteora has no effect on the direction of American Express i.e., American Express and GSR II go up and down completely randomly.
Pair Corralation between American Express and GSR II
If you would invest 27,147 in American Express on August 27, 2024 and sell it today you would earn a total of 2,983 from holding American Express or generate 10.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
American Express vs. GSR II Meteora
Performance |
| Timeline |
| American Express |
| GSR II Meteora |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Express and GSR II Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and GSR II
The main advantage of trading using opposite American Express and GSR II positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, GSR II 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 GSR II will offset losses from the drop in GSR II's long position.| American Express vs. SLM Corp | American Express vs. Orix Corp Ads | American Express vs. FirstCash | American Express vs. Medallion Financial Corp |
| GSR II vs. NETGEAR | GSR II vs. Playtika Holding Corp | GSR II vs. Emerson Radio | GSR II vs. Harmony Gold Mining |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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