Correlation Between American Express and Identiv
Can any of the company-specific risk be diversified away by investing in both American Express and Identiv 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 Identiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Identiv, you can compare the effects of market volatilities on American Express and Identiv 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 Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Identiv.
Diversification Opportunities for American Express and Identiv
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Identiv is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv 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 Identiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Identiv has no effect on the direction of American Express i.e., American Express and Identiv go up and down completely randomly.
Pair Corralation between American Express and Identiv
Considering the 90-day investment horizon American Express is expected to generate 0.52 times more return on investment than Identiv. However, American Express is 1.94 times less risky than Identiv. It trades about 0.13 of its potential returns per unit of risk. Identiv is currently generating about -0.02 per unit of risk. If you would invest 23,556 in American Express on August 30, 2024 and sell it today you would earn a total of 6,869 from holding American Express or generate 29.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. Identiv
Performance |
| Timeline |
| American Express |
| Identiv |
American Express and Identiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Identiv
The main advantage of trading using opposite American Express and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Identiv 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 Identiv will offset losses from the drop in Identiv's long position.| American Express vs. 360 Finance | American Express vs. Atlanticus Holdings | American Express vs. X Financial Class | American Express vs. Yirendai |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Stocks Directory Find actively traded stocks across global markets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |