Correlation Between American Express and IShares IBonds
Can any of the company-specific risk be diversified away by investing in both American Express and IShares IBonds 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 IShares IBonds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and iShares iBonds Dec, you can compare the effects of market volatilities on American Express and IShares IBonds 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 IShares IBonds. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and IShares IBonds.
Diversification Opportunities for American Express and IShares IBonds
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and IShares is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding American Express and iShares iBonds Dec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares iBonds Dec 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 IShares IBonds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares iBonds Dec has no effect on the direction of American Express i.e., American Express and IShares IBonds go up and down completely randomly.
Pair Corralation between American Express and IShares IBonds
Considering the 90-day investment horizon American Express is expected to generate 16.58 times more return on investment than IShares IBonds. However, American Express is 16.58 times more volatile than iShares iBonds Dec. It trades about 0.29 of its potential returns per unit of risk. iShares iBonds Dec is currently generating about 0.0 per unit of risk. If you would invest 27,147 in American Express on August 29, 2024 and sell it today you would earn a total of 3,410 from holding American Express or generate 12.56% 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. iShares iBonds Dec
Performance |
| Timeline |
| American Express |
| iShares iBonds Dec |
American Express and IShares IBonds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and IShares IBonds
The main advantage of trading using opposite American Express and IShares IBonds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, IShares IBonds 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 IShares IBonds will offset losses from the drop in IShares IBonds' long position.| American Express vs. Orix Corp Ads | American Express vs. Medallion Financial Corp | American Express vs. Oportun Financial Corp | American Express vs. SLM Corp Pb |
| IShares IBonds vs. iShares iBonds Dec | IShares IBonds vs. iShares iBonds Dec | IShares IBonds vs. iShares iBonds Dec | IShares IBonds vs. iShares iBonds Dec |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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