Correlation Between American Express and Inception Growth
Can any of the company-specific risk be diversified away by investing in both American Express and Inception Growth 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 Inception Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Inception Growth Acquisition, you can compare the effects of market volatilities on American Express and Inception Growth 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 Inception Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Inception Growth.
Diversification Opportunities for American Express and Inception Growth
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Inception is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Inception Growth Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inception Growth Acq 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 Inception Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inception Growth Acq has no effect on the direction of American Express i.e., American Express and Inception Growth go up and down completely randomly.
Pair Corralation between American Express and Inception Growth
Considering the 90-day investment horizon American Express is expected to generate 0.86 times more return on investment than Inception Growth. However, American Express is 1.17 times less risky than Inception Growth. It trades about 0.12 of its potential returns per unit of risk. Inception Growth Acquisition is currently generating about 0.0 per unit of risk. If you would invest 21,752 in American Express on August 27, 2024 and sell it today you would earn a total of 8,378 from holding American Express or generate 38.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. Inception Growth Acquisition
Performance |
| Timeline |
| American Express |
| Inception Growth Acq |
American Express and Inception Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Inception Growth
The main advantage of trading using opposite American Express and Inception Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Inception Growth 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 Inception Growth will offset losses from the drop in Inception Growth's long position.| American Express vs. SLM Corp | American Express vs. Orix Corp Ads | American Express vs. FirstCash | American Express vs. Medallion Financial Corp |
| Inception Growth vs. Harmony Gold Mining | Inception Growth vs. Tencent Music Entertainment | Inception Growth vs. Uranium Energy Corp | Inception Growth vs. NioCorp Developments Ltd |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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