Correlation Between American Express and OptiNose
Can any of the company-specific risk be diversified away by investing in both American Express and OptiNose 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 OptiNose into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and OptiNose, you can compare the effects of market volatilities on American Express and OptiNose 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 OptiNose. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and OptiNose.
Diversification Opportunities for American Express and OptiNose
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and OptiNose is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding American Express and OptiNose in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OptiNose 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 OptiNose. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OptiNose has no effect on the direction of American Express i.e., American Express and OptiNose go up and down completely randomly.
Pair Corralation between American Express and OptiNose
Considering the 90-day investment horizon American Express is expected to generate 0.27 times more return on investment than OptiNose. However, American Express is 3.72 times less risky than OptiNose. It trades about 0.18 of its potential returns per unit of risk. OptiNose is currently generating about -0.14 per unit of risk. If you would invest 25,365 in American Express on September 2, 2024 and sell it today you would earn a total of 5,103 from holding American Express or generate 20.12% 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. OptiNose
Performance |
| Timeline |
| American Express |
| OptiNose |
American Express and OptiNose Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and OptiNose
The main advantage of trading using opposite American Express and OptiNose positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, OptiNose 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 OptiNose will offset losses from the drop in OptiNose's long position.| American Express vs. 360 Finance | American Express vs. Atlanticus Holdings | American Express vs. Qudian Inc | American Express vs. Enova International |
| OptiNose vs. Collegium Pharmaceutical | OptiNose vs. Phibro Animal Health | OptiNose vs. ANI Pharmaceuticals | OptiNose vs. Procaps Group SA |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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