Correlation Between American Express and IShares Core
Can any of the company-specific risk be diversified away by investing in both American Express and IShares Core 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 Core 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 Core MSCI, you can compare the effects of market volatilities on American Express and IShares Core 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 Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and IShares Core.
Diversification Opportunities for American Express and IShares Core
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and IShares is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding American Express and iShares Core MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core MSCI 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 Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core MSCI has no effect on the direction of American Express i.e., American Express and IShares Core go up and down completely randomly.
Pair Corralation between American Express and IShares Core
Considering the 90-day investment horizon American Express is expected to generate 1.72 times more return on investment than IShares Core. However, American Express is 1.72 times more volatile than iShares Core MSCI. It trades about 0.1 of its potential returns per unit of risk. iShares Core MSCI is currently generating about 0.06 per unit of risk. If you would invest 14,628 in American Express on September 5, 2024 and sell it today you would earn a total of 15,583 from holding American Express or generate 106.53% 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. iShares Core MSCI
Performance |
| Timeline |
| American Express |
| iShares Core MSCI |
American Express and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and IShares Core
The main advantage of trading using opposite American Express and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, IShares Core 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 Core will offset losses from the drop in IShares Core's long position.| American Express vs. 360 Finance | American Express vs. Enova International | American Express vs. Navient Corp | American Express vs. Sentage Holdings |
| IShares Core vs. iShares Core MSCI | IShares Core vs. iShares Core International | IShares Core vs. iShares Core 10 | IShares Core vs. iShares MSCI Emerging |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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