Correlation Between American Express and Scottie Resources
Can any of the company-specific risk be diversified away by investing in both American Express and Scottie Resources 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 Scottie Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Scottie Resources Corp, you can compare the effects of market volatilities on American Express and Scottie Resources 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 Scottie Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Scottie Resources.
Diversification Opportunities for American Express and Scottie Resources
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Scottie is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Scottie Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scottie Resources Corp 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 Scottie Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scottie Resources Corp has no effect on the direction of American Express i.e., American Express and Scottie Resources go up and down completely randomly.
Pair Corralation between American Express and Scottie Resources
Considering the 90-day investment horizon American Express is expected to generate 0.3 times more return on investment than Scottie Resources. However, American Express is 3.38 times less risky than Scottie Resources. It trades about 0.1 of its potential returns per unit of risk. Scottie Resources Corp is currently generating about 0.01 per unit of risk. If you would invest 15,339 in American Express on September 3, 2024 and sell it today you would earn a total of 15,129 from holding American Express or generate 98.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. Scottie Resources Corp
Performance |
| Timeline |
| American Express |
| Scottie Resources Corp |
American Express and Scottie Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Scottie Resources
The main advantage of trading using opposite American Express and Scottie Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Scottie Resources 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 Scottie Resources will offset losses from the drop in Scottie Resources' long position.| American Express vs. Highway Holdings Limited | American Express vs. QCR Holdings | American Express vs. Partner Communications | American Express vs. Acumen Pharmaceuticals |
| Scottie Resources vs. Blackrock Silver Corp | Scottie Resources vs. AbraSilver Resource Corp | Scottie Resources vs. CMC Metals | Scottie Resources vs. Metallic Minerals Corp |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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