Correlation Between American Express and IShares 1
Can any of the company-specific risk be diversified away by investing in both American Express and IShares 1 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 1 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 1 3 Year, you can compare the effects of market volatilities on American Express and IShares 1 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 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and IShares 1.
Diversification Opportunities for American Express and IShares 1
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and IShares is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding American Express and iShares 1 3 Year in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares 1 3 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 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares 1 3 has no effect on the direction of American Express i.e., American Express and IShares 1 go up and down completely randomly.
Pair Corralation between American Express and IShares 1
Considering the 90-day investment horizon American Express is expected to generate 4.06 times more return on investment than IShares 1. However, American Express is 4.06 times more volatile than iShares 1 3 Year. It trades about 0.26 of its potential returns per unit of risk. iShares 1 3 Year is currently generating about -0.26 per unit of risk. If you would invest 27,147 in American Express on August 27, 2024 and sell it today you would earn a total of 2,983 from holding American Express or generate 10.99% 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 1 3 Year
Performance |
| Timeline |
| American Express |
| iShares 1 3 |
American Express and IShares 1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and IShares 1
The main advantage of trading using opposite American Express and IShares 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, IShares 1 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 1 will offset losses from the drop in IShares 1's long position.| American Express vs. SLM Corp | American Express vs. Orix Corp Ads | American Express vs. FirstCash | American Express vs. Medallion Financial Corp |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |