Correlation Between American Express and Silvercrest Asset
Can any of the company-specific risk be diversified away by investing in both American Express and Silvercrest Asset 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 Silvercrest Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Silvercrest Asset Management, you can compare the effects of market volatilities on American Express and Silvercrest Asset 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 Silvercrest Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Silvercrest Asset.
Diversification Opportunities for American Express and Silvercrest Asset
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Silvercrest is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Silvercrest Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercrest Asset 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 Silvercrest Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silvercrest Asset has no effect on the direction of American Express i.e., American Express and Silvercrest Asset go up and down completely randomly.
Pair Corralation between American Express and Silvercrest Asset
Considering the 90-day investment horizon American Express is expected to generate 0.61 times more return on investment than Silvercrest Asset. However, American Express is 1.64 times less risky than Silvercrest Asset. It trades about 0.23 of its potential returns per unit of risk. Silvercrest Asset Management is currently generating about 0.03 per unit of risk. If you would invest 28,554 in American Express on September 19, 2024 and sell it today you would earn a total of 1,580 from holding American Express or generate 5.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. Silvercrest Asset Management
Performance |
| Timeline |
| American Express |
| Silvercrest Asset |
American Express and Silvercrest Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Silvercrest Asset
The main advantage of trading using opposite American Express and Silvercrest Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Silvercrest Asset 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 Silvercrest Asset will offset losses from the drop in Silvercrest Asset's long position.| American Express vs. Visa Class A | American Express vs. PayPal Holdings | American Express vs. Mastercard |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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