Correlation Between American Express and Global X
Can any of the company-specific risk be diversified away by investing in both American Express and Global X 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 Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Global X Short Term, you can compare the effects of market volatilities on American Express and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Global X.
Diversification Opportunities for American Express and Global X
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Global is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Global X Short Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Short 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Short has no effect on the direction of American Express i.e., American Express and Global X go up and down completely randomly.
Pair Corralation between American Express and Global X
Considering the 90-day investment horizon American Express is expected to generate 23.18 times more return on investment than Global X. However, American Express is 23.18 times more volatile than Global X Short Term. It trades about 0.1 of its potential returns per unit of risk. Global X Short Term is currently generating about -0.03 per unit of risk. If you would invest 15,008 in American Express on August 29, 2024 and sell it today you would earn a total of 15,417 from holding American Express or generate 102.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 11.49% |
| Values | Daily Returns |
American Express vs. Global X Short Term
Performance |
| Timeline |
| American Express |
| Global X Short |
American Express and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Global X
The main advantage of trading using opposite American Express and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| American Express vs. Visa Class A | American Express vs. Mastercard | American Express vs. Discover Financial Services |
| Global X vs. Global X Funds | Global X vs. US Treasury 12 | Global X vs. Tidal Trust II | Global X vs. Franklin Liberty Treasury |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |