Correlation Between American Express and Shawcor
Can any of the company-specific risk be diversified away by investing in both American Express and Shawcor 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 Shawcor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Shawcor, you can compare the effects of market volatilities on American Express and Shawcor 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 Shawcor. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Shawcor.
Diversification Opportunities for American Express and Shawcor
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Shawcor is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Shawcor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shawcor 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 Shawcor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shawcor has no effect on the direction of American Express i.e., American Express and Shawcor go up and down completely randomly.
Pair Corralation between American Express and Shawcor
If you would invest 27,019 in American Express on September 4, 2024 and sell it today you would earn a total of 3,207 from holding American Express or generate 11.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.76% |
| Values | Daily Returns |
American Express vs. Shawcor
Performance |
| Timeline |
| American Express |
| Shawcor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Express and Shawcor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Shawcor
The main advantage of trading using opposite American Express and Shawcor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Shawcor 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 Shawcor will offset losses from the drop in Shawcor's long position.| American Express vs. 360 Finance | American Express vs. Enova International | American Express vs. X Financial Class | American Express vs. LendingClub Corp |
| Shawcor vs. STEP Energy Services | Shawcor vs. Total Energy Services | Shawcor vs. Trican Well Service | Shawcor vs. High Arctic Energy |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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