Correlation Between American Express and Sigma Labs
Can any of the company-specific risk be diversified away by investing in both American Express and Sigma Labs 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 Sigma Labs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Sigma Labs, you can compare the effects of market volatilities on American Express and Sigma Labs 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 Sigma Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Sigma Labs.
Diversification Opportunities for American Express and Sigma Labs
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and Sigma is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Sigma Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sigma Labs 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 Sigma Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sigma Labs has no effect on the direction of American Express i.e., American Express and Sigma Labs go up and down completely randomly.
Pair Corralation between American Express and Sigma Labs
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 Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
American Express vs. Sigma Labs
Performance |
| Timeline |
| American Express |
| Sigma Labs |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Express and Sigma Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Sigma Labs
The main advantage of trading using opposite American Express and Sigma Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Sigma Labs 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 Sigma Labs will offset losses from the drop in Sigma Labs' long position.| American Express vs. SLM Corp | American Express vs. Orix Corp Ads | American Express vs. FirstCash | American Express vs. Medallion Financial Corp |
| Sigma Labs vs. Flint Telecom Group | Sigma Labs vs. Castellum | Sigma Labs vs. Datametrex AI Limited | Sigma Labs vs. TTEC Holdings |
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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