Correlation Between American Express and Modern Mobility
Can any of the company-specific risk be diversified away by investing in both American Express and Modern Mobility 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 Modern Mobility into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Modern Mobility Aids, you can compare the effects of market volatilities on American Express and Modern Mobility 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 Modern Mobility. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Modern Mobility.
Diversification Opportunities for American Express and Modern Mobility
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Modern is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Modern Mobility Aids in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Modern Mobility Aids 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 Modern Mobility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Modern Mobility Aids has no effect on the direction of American Express i.e., American Express and Modern Mobility go up and down completely randomly.
Pair Corralation between American Express and Modern Mobility
Considering the 90-day investment horizon American Express is expected to generate 20.76 times less return on investment than Modern Mobility. But when comparing it to its historical volatility, American Express is 20.69 times less risky than Modern Mobility. It trades about 0.13 of its potential returns per unit of risk. Modern Mobility Aids is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 0.60 in Modern Mobility Aids on August 28, 2024 and sell it today you would earn a total of 0.30 from holding Modern Mobility Aids or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
American Express vs. Modern Mobility Aids
Performance |
| Timeline |
| American Express |
| Modern Mobility Aids |
American Express and Modern Mobility Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Modern Mobility
The main advantage of trading using opposite American Express and Modern Mobility positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Modern Mobility 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 Modern Mobility will offset losses from the drop in Modern Mobility's long position.| American Express vs. Orix Corp Ads | American Express vs. Medallion Financial Corp | American Express vs. Oportun Financial Corp | American Express vs. SLM Corp Pb |
| Modern Mobility vs. Scworx Corp | Modern Mobility vs. Nano Mobile Healthcare | Modern Mobility vs. National Research Corp | Modern Mobility vs. EUDA Health Holdings |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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