Correlation Between American Express and RSTN Old
Can any of the company-specific risk be diversified away by investing in both American Express and RSTN Old 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 RSTN Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and RSTN Old, you can compare the effects of market volatilities on American Express and RSTN Old 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 RSTN Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and RSTN Old.
Diversification Opportunities for American Express and RSTN Old
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and RSTN is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding American Express and RSTN Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RSTN Old 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 RSTN Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RSTN Old has no effect on the direction of American Express i.e., American Express and RSTN Old go up and down completely randomly.
Pair Corralation between American Express and RSTN Old
If you would invest 30,449 in American Express on October 26, 2024 and sell it today you would earn a total of 1,198 from holding American Express or generate 3.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 2.5% |
| Values | Daily Returns |
American Express vs. RSTN Old
Performance |
| Timeline |
| American Express |
| RSTN Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Express and RSTN Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and RSTN Old
The main advantage of trading using opposite American Express and RSTN Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, RSTN Old 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 RSTN Old will offset losses from the drop in RSTN Old's long position.| American Express vs. Visa Class A | American Express vs. PayPal Holdings | American Express vs. Upstart Holdings | American Express vs. Mastercard |
| RSTN Old vs. Extreme Networks | RSTN Old vs. Terns Pharmaceuticals | RSTN Old vs. Genasys | RSTN Old vs. ADC Therapeutics 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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