Correlation Between American Express and Peak Bancorp
Can any of the company-specific risk be diversified away by investing in both American Express and Peak Bancorp 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 Peak Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Peak Bancorp, you can compare the effects of market volatilities on American Express and Peak Bancorp 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 Peak Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Peak Bancorp.
Diversification Opportunities for American Express and Peak Bancorp
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Peak is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Peak Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peak Bancorp 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 Peak Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peak Bancorp has no effect on the direction of American Express i.e., American Express and Peak Bancorp go up and down completely randomly.
Pair Corralation between American Express and Peak Bancorp
Considering the 90-day investment horizon American Express is expected to generate 0.63 times more return on investment than Peak Bancorp. However, American Express is 1.58 times less risky than Peak Bancorp. It trades about 0.12 of its potential returns per unit of risk. Peak Bancorp is currently generating about -0.01 per unit of risk. If you would invest 16,615 in American Express on September 12, 2024 and sell it today you would earn a total of 13,596 from holding American Express or generate 81.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 6.7% |
| Values | Daily Returns |
American Express vs. Peak Bancorp
Performance |
| Timeline |
| American Express |
| Peak Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Express and Peak Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Peak Bancorp
The main advantage of trading using opposite American Express and Peak Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Peak Bancorp 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 Peak Bancorp will offset losses from the drop in Peak Bancorp's long position.| American Express vs. Victory Integrity Smallmid Cap | American Express vs. Hilton Worldwide Holdings | American Express vs. NVIDIA | American Express vs. JPMorgan Chase Co |
| Peak Bancorp vs. MVB Financial Corp | Peak Bancorp vs. Finward Bancorp | Peak Bancorp vs. First Community | Peak Bancorp vs. LINKBANCORP |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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