Correlation Between American Express and Eagle Small
Can any of the company-specific risk be diversified away by investing in both American Express and Eagle Small 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 Eagle Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Eagle Small Cap, you can compare the effects of market volatilities on American Express and Eagle Small 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 Eagle Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Eagle Small.
Diversification Opportunities for American Express and Eagle Small
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Eagle is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Eagle Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Small Cap 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 Eagle Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Small Cap has no effect on the direction of American Express i.e., American Express and Eagle Small go up and down completely randomly.
Pair Corralation between American Express and Eagle Small
Considering the 90-day investment horizon American Express is expected to generate 1.34 times more return on investment than Eagle Small. However, American Express is 1.34 times more volatile than Eagle Small Cap. It trades about 0.19 of its potential returns per unit of risk. Eagle Small Cap is currently generating about 0.2 per unit of risk. If you would invest 27,123 in American Express on August 24, 2024 and sell it today you would earn a total of 2,177 from holding American Express or generate 8.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. Eagle Small Cap
Performance |
| Timeline |
| American Express |
| Eagle Small Cap |
American Express and Eagle Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Eagle Small
The main advantage of trading using opposite American Express and Eagle Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Eagle Small 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 Eagle Small will offset losses from the drop in Eagle Small's long position.| American Express vs. Visa Class A | American Express vs. Mastercard | American Express vs. SoFi Technologies | American Express vs. Coca Cola Consolidated |
| Eagle Small vs. Teton Vertible Securities | Eagle Small vs. Harbor Vertible Securities | Eagle Small vs. Mainstay Vertible Fund | Eagle Small vs. Invesco Vertible Securities |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |