Correlation Between American Express and Honey Badger
Can any of the company-specific risk be diversified away by investing in both American Express and Honey Badger 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 Honey Badger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Honey Badger Silver, you can compare the effects of market volatilities on American Express and Honey Badger 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 Honey Badger. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Honey Badger.
Diversification Opportunities for American Express and Honey Badger
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and Honey is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Honey Badger Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Honey Badger Silver 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 Honey Badger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Honey Badger Silver has no effect on the direction of American Express i.e., American Express and Honey Badger go up and down completely randomly.
Pair Corralation between American Express and Honey Badger
Considering the 90-day investment horizon American Express is expected to generate 4.53 times less return on investment than Honey Badger. But when comparing it to its historical volatility, American Express is 4.05 times less risky than Honey Badger. It trades about 0.18 of its potential returns per unit of risk. Honey Badger Silver is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 7.09 in Honey Badger Silver on October 21, 2024 and sell it today you would earn a total of 1.53 from holding Honey Badger Silver or generate 21.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. Honey Badger Silver
Performance |
| Timeline |
| American Express |
| Honey Badger Silver |
American Express and Honey Badger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Honey Badger
The main advantage of trading using opposite American Express and Honey Badger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Honey Badger 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 Honey Badger will offset losses from the drop in Honey Badger's long position.| American Express vs. Upstart Holdings | American Express vs. Affirm Holdings | American Express vs. Lucid Group | American Express vs. Palantir Technologies Class |
| Honey Badger vs. Cartier Iron Corp | Honey Badger vs. Arctic Star Exploration | Honey Badger vs. Capella Minerals Limited | Honey Badger vs. Denarius Silver Corp |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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