Correlation Between American Express and Oramed Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both American Express and Oramed Pharmaceuticals 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 Oramed Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Oramed Pharmaceuticals, you can compare the effects of market volatilities on American Express and Oramed Pharmaceuticals 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 Oramed Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Oramed Pharmaceuticals.
Diversification Opportunities for American Express and Oramed Pharmaceuticals
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Oramed is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Oramed Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oramed Pharmaceuticals 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 Oramed Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oramed Pharmaceuticals has no effect on the direction of American Express i.e., American Express and Oramed Pharmaceuticals go up and down completely randomly.
Pair Corralation between American Express and Oramed Pharmaceuticals
Considering the 90-day investment horizon American Express is expected to generate 0.52 times more return on investment than Oramed Pharmaceuticals. However, American Express is 1.92 times less risky than Oramed Pharmaceuticals. It trades about 0.13 of its potential returns per unit of risk. Oramed Pharmaceuticals is currently generating about -0.02 per unit of risk. If you would invest 22,286 in American Express on September 3, 2024 and sell it today you would earn a total of 8,182 from holding American Express or generate 36.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. Oramed Pharmaceuticals
Performance |
| Timeline |
| American Express |
| Oramed Pharmaceuticals |
American Express and Oramed Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Oramed Pharmaceuticals
The main advantage of trading using opposite American Express and Oramed Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Oramed Pharmaceuticals 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 Oramed Pharmaceuticals will offset losses from the drop in Oramed Pharmaceuticals' long position.| American Express vs. Highway Holdings Limited | American Express vs. QCR Holdings | American Express vs. Partner Communications | American Express vs. Acumen Pharmaceuticals |
| Oramed Pharmaceuticals vs. Protalix Biotherapeutics | Oramed Pharmaceuticals vs. Corvus Pharmaceuticals | Oramed Pharmaceuticals vs. Aldeyra | Oramed Pharmaceuticals vs. Checkpoint Therapeutics |
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.
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