Correlation Between American Express and ClearShares Ultra
Can any of the company-specific risk be diversified away by investing in both American Express and ClearShares Ultra 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 ClearShares Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and ClearShares Ultra Short Maturity, you can compare the effects of market volatilities on American Express and ClearShares Ultra 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 ClearShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and ClearShares Ultra.
Diversification Opportunities for American Express and ClearShares Ultra
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and ClearShares is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding American Express and ClearShares Ultra Short Maturi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClearShares Ultra Short 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 ClearShares Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ClearShares Ultra Short has no effect on the direction of American Express i.e., American Express and ClearShares Ultra go up and down completely randomly.
Pair Corralation between American Express and ClearShares Ultra
Considering the 90-day investment horizon American Express is expected to generate 110.46 times more return on investment than ClearShares Ultra. However, American Express is 110.46 times more volatile than ClearShares Ultra Short Maturity. It trades about 0.18 of its potential returns per unit of risk. ClearShares Ultra Short Maturity is currently generating about 0.99 per unit of risk. If you would invest 27,240 in American Express on August 23, 2024 and sell it today you would earn a total of 2,060 from holding American Express or generate 7.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. ClearShares Ultra Short Maturi
Performance |
| Timeline |
| American Express |
| ClearShares Ultra Short |
American Express and ClearShares Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and ClearShares Ultra
The main advantage of trading using opposite American Express and ClearShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, ClearShares Ultra 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 ClearShares Ultra will offset losses from the drop in ClearShares Ultra's long position.| American Express vs. Small Cap Core | American Express vs. Morningstar Unconstrained Allocation | American Express vs. Mutual Of America | American Express vs. Ep Emerging Markets |
| ClearShares Ultra vs. Valued Advisers Trust | ClearShares Ultra vs. Xtrackers California Municipal | ClearShares Ultra vs. Principal Exchange Traded Funds | ClearShares Ultra vs. PIMCO Enhanced Short |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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