Correlation Between American Express and MDGS Old
Can any of the company-specific risk be diversified away by investing in both American Express and MDGS Old 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 MDGS Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and MDGS Old, you can compare the effects of market volatilities on American Express and MDGS Old 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 MDGS Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and MDGS Old.
Diversification Opportunities for American Express and MDGS Old
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and MDGS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Express and MDGS Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MDGS Old 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 MDGS Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MDGS Old has no effect on the direction of American Express i.e., American Express and MDGS Old go up and down completely randomly.
Pair Corralation between American Express and MDGS Old
Considering the 90-day investment horizon American Express is expected to generate 0.31 times more return on investment than MDGS Old. However, American Express is 3.2 times less risky than MDGS Old. It trades about 0.09 of its potential returns per unit of risk. MDGS Old is currently generating about -0.04 per unit of risk. If you would invest 17,436 in American Express on October 25, 2024 and sell it today you would earn a total of 14,789 from holding American Express or generate 84.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 70.18% |
| Values | Daily Returns |
American Express vs. MDGS Old
Performance |
| Timeline |
| American Express |
| MDGS Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Express and MDGS Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and MDGS Old
The main advantage of trading using opposite American Express and MDGS Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, MDGS Old 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 MDGS Old will offset losses from the drop in MDGS Old's long position.| American Express vs. Bank of America | American Express vs. RLJ Lodging Trust | American Express vs. PennyMac Finl Svcs | American Express vs. Newhydrogen |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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