Correlation Between American Express and PGT Innovations
Can any of the company-specific risk be diversified away by investing in both American Express and PGT Innovations 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 PGT Innovations into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and PGT Innovations, you can compare the effects of market volatilities on American Express and PGT Innovations 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 PGT Innovations. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and PGT Innovations.
Diversification Opportunities for American Express and PGT Innovations
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and PGT is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding American Express and PGT Innovations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGT Innovations 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 PGT Innovations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGT Innovations has no effect on the direction of American Express i.e., American Express and PGT Innovations go up and down completely randomly.
Pair Corralation between American Express and PGT Innovations
If you would invest 27,147 in American Express on August 28, 2024 and sell it today you would earn a total of 3,374 from holding American Express or generate 12.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
American Express vs. PGT Innovations
Performance |
| Timeline |
| American Express |
| PGT Innovations |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Express and PGT Innovations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and PGT Innovations
The main advantage of trading using opposite American Express and PGT Innovations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, PGT Innovations 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 PGT Innovations will offset losses from the drop in PGT Innovations' long position.| American Express vs. SLM Corp | American Express vs. Orix Corp Ads | American Express vs. FirstCash | American Express vs. Medallion Financial Corp |
| PGT Innovations vs. Quanex Building Products | PGT Innovations vs. Janus International Group | PGT Innovations vs. Interface | PGT Innovations vs. Apogee Enterprises |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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