Correlation Between American Express and Southern BancShares
Can any of the company-specific risk be diversified away by investing in both American Express and Southern BancShares 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 Southern BancShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Southern BancShares PFD, you can compare the effects of market volatilities on American Express and Southern BancShares 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 Southern BancShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Southern BancShares.
Diversification Opportunities for American Express and Southern BancShares
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and Southern is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Southern BancShares PFD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern BancShares PFD 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 Southern BancShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern BancShares PFD has no effect on the direction of American Express i.e., American Express and Southern BancShares go up and down completely randomly.
Pair Corralation between American Express and Southern BancShares
If you would invest 29,773 in American Express on November 3, 2024 and sell it today you would earn a total of 1,954 from holding American Express or generate 6.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
American Express vs. Southern BancShares PFD
Performance |
| Timeline |
| American Express |
| Southern BancShares PFD |
American Express and Southern BancShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Southern BancShares
The main advantage of trading using opposite American Express and Southern BancShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Southern BancShares 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 Southern BancShares will offset losses from the drop in Southern BancShares' long position.| American Express vs. Visa Class A | American Express vs. PayPal Holdings | American Express vs. Capital One Financial | American Express vs. Upstart Holdings |
| Southern BancShares vs. Grocery Outlet Holding | Southern BancShares vs. PennantPark Floating Rate | Southern BancShares vs. FS KKR Capital | Southern BancShares vs. Gladstone Investment |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |