Correlation Between American Express and Arcelormittal
Can any of the company-specific risk be diversified away by investing in both American Express and Arcelormittal 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 Arcelormittal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Arcelormittal, you can compare the effects of market volatilities on American Express and Arcelormittal 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 Arcelormittal. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Arcelormittal.
Diversification Opportunities for American Express and Arcelormittal
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Arcelormittal is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Arcelormittal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcelormittal 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 Arcelormittal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcelormittal has no effect on the direction of American Express i.e., American Express and Arcelormittal go up and down completely randomly.
Pair Corralation between American Express and Arcelormittal
Considering the 90-day investment horizon American Express is expected to generate 0.73 times more return on investment than Arcelormittal. However, American Express is 1.37 times less risky than Arcelormittal. It trades about 0.09 of its potential returns per unit of risk. Arcelormittal is currently generating about 0.01 per unit of risk. If you would invest 15,199 in American Express on August 26, 2024 and sell it today you would earn a total of 14,931 from holding American Express or generate 98.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 22.94% |
| Values | Daily Returns |
American Express vs. Arcelormittal
Performance |
| Timeline |
| American Express |
| Arcelormittal |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Express and Arcelormittal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Arcelormittal
The main advantage of trading using opposite American Express and Arcelormittal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Arcelormittal 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 Arcelormittal will offset losses from the drop in Arcelormittal's long position.| American Express vs. SLM Corp | American Express vs. Orix Corp Ads | American Express vs. FirstCash | American Express vs. Medallion Financial Corp |
| Arcelormittal vs. Affiliated Managers Group | Arcelormittal vs. Maiden Holdings North | Arcelormittal vs. Credit Enhanced Corts | Arcelormittal vs. Affiliated Managers Group, |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |