Correlation Between American Express and Hamilton Lane
Can any of the company-specific risk be diversified away by investing in both American Express and Hamilton Lane 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 Hamilton Lane into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Hamilton Lane, you can compare the effects of market volatilities on American Express and Hamilton Lane 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 Hamilton Lane. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Hamilton Lane.
Diversification Opportunities for American Express and Hamilton Lane
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Hamilton is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Hamilton Lane in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Lane 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 Hamilton Lane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Lane has no effect on the direction of American Express i.e., American Express and Hamilton Lane go up and down completely randomly.
Pair Corralation between American Express and Hamilton Lane
Considering the 90-day investment horizon American Express is expected to generate 0.78 times more return on investment than Hamilton Lane. However, American Express is 1.28 times less risky than Hamilton Lane. It trades about 0.12 of its potential returns per unit of risk. Hamilton Lane is currently generating about 0.08 per unit of risk. If you would invest 20,889 in American Express on November 4, 2024 and sell it today you would earn a total of 10,856 from holding American Express or generate 51.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. Hamilton Lane
Performance |
| Timeline |
| American Express |
| Hamilton Lane |
American Express and Hamilton Lane Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Hamilton Lane
The main advantage of trading using opposite American Express and Hamilton Lane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Hamilton Lane 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 Hamilton Lane will offset losses from the drop in Hamilton Lane's long position.| American Express vs. 360 Finance | American Express vs. Atlanticus Holdings | American Express vs. Qudian Inc | American Express vs. Enova International |
| Hamilton Lane vs. Noah Holdings | Hamilton Lane vs. Alvarium Tiedemann Holdings | Hamilton Lane vs. Blackrock Muniyield | Hamilton Lane vs. Blackrock Muni Intermediate |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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