Correlation Between American Express and FlexShares Disciplined
Can any of the company-specific risk be diversified away by investing in both American Express and FlexShares Disciplined 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 FlexShares Disciplined into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and FlexShares Disciplined Duration, you can compare the effects of market volatilities on American Express and FlexShares Disciplined 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 FlexShares Disciplined. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and FlexShares Disciplined.
Diversification Opportunities for American Express and FlexShares Disciplined
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and FlexShares is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding American Express and FlexShares Disciplined Duratio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexShares Disciplined 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 FlexShares Disciplined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexShares Disciplined has no effect on the direction of American Express i.e., American Express and FlexShares Disciplined go up and down completely randomly.
Pair Corralation between American Express and FlexShares Disciplined
Considering the 90-day investment horizon American Express is expected to generate 5.7 times more return on investment than FlexShares Disciplined. However, American Express is 5.7 times more volatile than FlexShares Disciplined Duration. It trades about 0.28 of its potential returns per unit of risk. FlexShares Disciplined Duration is currently generating about 0.08 per unit of risk. If you would invest 27,043 in American Express on August 30, 2024 and sell it today you would earn a total of 3,382 from holding American Express or generate 12.51% 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. FlexShares Disciplined Duratio
Performance |
| Timeline |
| American Express |
| FlexShares Disciplined |
American Express and FlexShares Disciplined Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and FlexShares Disciplined
The main advantage of trading using opposite American Express and FlexShares Disciplined positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, FlexShares Disciplined 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 FlexShares Disciplined will offset losses from the drop in FlexShares Disciplined'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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |