Correlation Between American Express and Ruths Hospitality
Can any of the company-specific risk be diversified away by investing in both American Express and Ruths Hospitality 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 Ruths Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Ruths Hospitality Group, you can compare the effects of market volatilities on American Express and Ruths Hospitality 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 Ruths Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Ruths Hospitality.
Diversification Opportunities for American Express and Ruths Hospitality
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Ruths is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Ruths Hospitality Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ruths Hospitality 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 Ruths Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ruths Hospitality has no effect on the direction of American Express i.e., American Express and Ruths Hospitality go up and down completely randomly.
Pair Corralation between American Express and Ruths Hospitality
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. Ruths Hospitality Group
Performance |
| Timeline |
| American Express |
| Ruths Hospitality |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Express and Ruths Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Ruths Hospitality
The main advantage of trading using opposite American Express and Ruths Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Ruths Hospitality 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 Ruths Hospitality will offset losses from the drop in Ruths Hospitality's long position.| American Express vs. SLM Corp | American Express vs. Orix Corp Ads | American Express vs. FirstCash | American Express vs. Medallion Financial Corp |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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