Correlation Between American Express and Secoo Holding
Can any of the company-specific risk be diversified away by investing in both American Express and Secoo Holding 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 Secoo Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Secoo Holding, you can compare the effects of market volatilities on American Express and Secoo Holding 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 Secoo Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Secoo Holding.
Diversification Opportunities for American Express and Secoo Holding
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Secoo is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Secoo Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Secoo Holding 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 Secoo Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Secoo Holding has no effect on the direction of American Express i.e., American Express and Secoo Holding go up and down completely randomly.
Pair Corralation between American Express and Secoo Holding
If you would invest 27,123 in American Express on August 24, 2024 and sell it today you would earn a total of 3,007 from holding American Express or generate 11.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
American Express vs. Secoo Holding
Performance |
| Timeline |
| American Express |
| Secoo Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Express and Secoo Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Secoo Holding
The main advantage of trading using opposite American Express and Secoo Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Secoo Holding 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 Secoo Holding will offset losses from the drop in Secoo Holding's long position.| American Express vs. Visa Class A | American Express vs. Mastercard | American Express vs. SoFi Technologies | American Express vs. Coca Cola Consolidated |
| Secoo Holding vs. Kidpik Corp | Secoo Holding vs. Qurate Retail Series | Secoo Holding vs. Natural Health Trend | Secoo Holding vs. Liquidity Services |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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