Correlation Between American Express and IndexIQ
Can any of the company-specific risk be diversified away by investing in both American Express and IndexIQ 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 IndexIQ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and IndexIQ, you can compare the effects of market volatilities on American Express and IndexIQ 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 IndexIQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and IndexIQ.
Diversification Opportunities for American Express and IndexIQ
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and IndexIQ is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding American Express and IndexIQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IndexIQ 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 IndexIQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IndexIQ has no effect on the direction of American Express i.e., American Express and IndexIQ go up and down completely randomly.
Pair Corralation between American Express and IndexIQ
If you would invest 14,914 in American Express on September 4, 2024 and sell it today you would earn a total of 15,312 from holding American Express or generate 102.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
American Express vs. IndexIQ
Performance |
| Timeline |
| American Express |
| IndexIQ |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Express and IndexIQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and IndexIQ
The main advantage of trading using opposite American Express and IndexIQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, IndexIQ 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 IndexIQ will offset losses from the drop in IndexIQ's long position.| American Express vs. 360 Finance | American Express vs. Atlanticus Holdings | American Express vs. Enova International | American Express vs. X Financial Class |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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