Correlation Between American Express and Provenance Gold
Can any of the company-specific risk be diversified away by investing in both American Express and Provenance Gold 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 Provenance Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Provenance Gold Corp, you can compare the effects of market volatilities on American Express and Provenance Gold 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 Provenance Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Provenance Gold.
Diversification Opportunities for American Express and Provenance Gold
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Provenance is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Provenance Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Provenance Gold Corp 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 Provenance Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Provenance Gold Corp has no effect on the direction of American Express i.e., American Express and Provenance Gold go up and down completely randomly.
Pair Corralation between American Express and Provenance Gold
Considering the 90-day investment horizon American Express is expected to generate 0.39 times more return on investment than Provenance Gold. However, American Express is 2.54 times less risky than Provenance Gold. It trades about 0.19 of its potential returns per unit of risk. Provenance Gold Corp is currently generating about 0.02 per unit of risk. If you would invest 29,810 in American Express on October 23, 2024 and sell it today you would earn a total of 1,446 from holding American Express or generate 4.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. Provenance Gold Corp
Performance |
| Timeline |
| American Express |
| Provenance Gold Corp |
American Express and Provenance Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Provenance Gold
The main advantage of trading using opposite American Express and Provenance Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Provenance Gold 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 Provenance Gold will offset losses from the drop in Provenance Gold's long position.| American Express vs. Visa Class A | American Express vs. Mastercard | American Express vs. MSCI ACWI exAUCONSUMER | American Express vs. Sycamore Entmt Grp |
| Provenance Gold vs. Chesapeake Gold Corp | Provenance Gold vs. Clifton Mining Co | Provenance Gold vs. Usha Resources | Provenance Gold vs. American Copper Development |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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