Correlation Between American Express and Lattice Strategies
Can any of the company-specific risk be diversified away by investing in both American Express and Lattice Strategies 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 Lattice Strategies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Lattice Strategies Trust, you can compare the effects of market volatilities on American Express and Lattice Strategies 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 Lattice Strategies. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Lattice Strategies.
Diversification Opportunities for American Express and Lattice Strategies
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Lattice is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Lattice Strategies Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lattice Strategies Trust 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 Lattice Strategies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lattice Strategies Trust has no effect on the direction of American Express i.e., American Express and Lattice Strategies go up and down completely randomly.
Pair Corralation between American Express and Lattice Strategies
Considering the 90-day investment horizon American Express is expected to generate 2.13 times more return on investment than Lattice Strategies. However, American Express is 2.13 times more volatile than Lattice Strategies Trust. It trades about 0.13 of its potential returns per unit of risk. Lattice Strategies Trust is currently generating about 0.16 per unit of risk. If you would invest 23,556 in American Express on September 1, 2024 and sell it today you would earn a total of 6,912 from holding American Express or generate 29.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
American Express vs. Lattice Strategies Trust
Performance |
| Timeline |
| American Express |
| Lattice Strategies Trust |
American Express and Lattice Strategies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Lattice Strategies
The main advantage of trading using opposite American Express and Lattice Strategies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Lattice Strategies 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 Lattice Strategies will offset losses from the drop in Lattice Strategies' long position.| American Express vs. 360 Finance | American Express vs. Atlanticus Holdings | American Express vs. Qudian Inc | American Express vs. Enova International |
| Lattice Strategies vs. FT Vest Equity | Lattice Strategies vs. Northern Lights | Lattice Strategies vs. Dimensional International High | Lattice Strategies vs. Matthews China Discovery |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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