Correlation Between American Express and Kavango Resources
Can any of the company-specific risk be diversified away by investing in both American Express and Kavango Resources 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 Kavango Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Kavango Resources Plc, you can compare the effects of market volatilities on American Express and Kavango Resources 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 Kavango Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Kavango Resources.
Diversification Opportunities for American Express and Kavango Resources
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Kavango is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Kavango Resources Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kavango Resources Plc 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 Kavango Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kavango Resources Plc has no effect on the direction of American Express i.e., American Express and Kavango Resources go up and down completely randomly.
Pair Corralation between American Express and Kavango Resources
Considering the 90-day investment horizon American Express is expected to generate 0.35 times more return on investment than Kavango Resources. However, American Express is 2.83 times less risky than Kavango Resources. It trades about 0.28 of its potential returns per unit of risk. Kavango Resources Plc is currently generating about -0.35 per unit of risk. If you would invest 27,269 in American Express on September 2, 2024 and sell it today you would earn a total of 3,199 from holding American Express or generate 11.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. Kavango Resources Plc
Performance |
| Timeline |
| American Express |
| Kavango Resources Plc |
American Express and Kavango Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Kavango Resources
The main advantage of trading using opposite American Express and Kavango Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Kavango Resources 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 Kavango Resources will offset losses from the drop in Kavango Resources' long position.| American Express vs. 360 Finance | American Express vs. Atlanticus Holdings | American Express vs. Qudian Inc | American Express vs. Enova International |
| Kavango Resources vs. Stans Energy Corp | Kavango Resources vs. Nickel Creek Platinum | Kavango Resources vs. Starr Peak Exploration | Kavango Resources vs. Leading Edge Materials |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |