Correlation Between American Express and MCAN Mortgage
Can any of the company-specific risk be diversified away by investing in both American Express and MCAN Mortgage 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 MCAN Mortgage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and MCAN Mortgage, you can compare the effects of market volatilities on American Express and MCAN Mortgage 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 MCAN Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and MCAN Mortgage.
Diversification Opportunities for American Express and MCAN Mortgage
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and MCAN is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding American Express and MCAN Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCAN Mortgage 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 MCAN Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCAN Mortgage has no effect on the direction of American Express i.e., American Express and MCAN Mortgage go up and down completely randomly.
Pair Corralation between American Express and MCAN Mortgage
Considering the 90-day investment horizon American Express is expected to generate 1.33 times more return on investment than MCAN Mortgage. However, American Express is 1.33 times more volatile than MCAN Mortgage. It trades about 0.28 of its potential returns per unit of risk. MCAN Mortgage is currently generating about 0.1 per unit of risk. If you would invest 27,019 in American Express on September 4, 2024 and sell it today you would earn a total of 3,207 from holding American Express or generate 11.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
American Express vs. MCAN Mortgage
Performance |
| Timeline |
| American Express |
| MCAN Mortgage |
American Express and MCAN Mortgage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and MCAN Mortgage
The main advantage of trading using opposite American Express and MCAN Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, MCAN Mortgage 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 MCAN Mortgage will offset losses from the drop in MCAN Mortgage's long position.| American Express vs. 360 Finance | American Express vs. Enova International | American Express vs. X Financial Class | American Express vs. LendingClub Corp |
| MCAN Mortgage vs. Western Asset Global | MCAN Mortgage vs. Invesco Trust For | MCAN Mortgage vs. Logan Ridge Finance | MCAN Mortgage vs. Invesco Advantage MIT |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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