Correlation Between American Express and DWS
Can any of the company-specific risk be diversified away by investing in both American Express and DWS 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 DWS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and DWS, you can compare the effects of market volatilities on American Express and DWS 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 DWS. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and DWS.
Diversification Opportunities for American Express and DWS
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and DWS is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding American Express and DWS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DWS 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 DWS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DWS has no effect on the direction of American Express i.e., American Express and DWS go up and down completely randomly.
Pair Corralation between American Express and DWS
If you would invest 27,408 in American Express on August 31, 2024 and sell it today you would earn a total of 3,017 from holding American Express or generate 11.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.55% |
| Values | Daily Returns |
American Express vs. DWS
Performance |
| Timeline |
| American Express |
| DWS |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Express and DWS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and DWS
The main advantage of trading using opposite American Express and DWS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, DWS 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 DWS will offset losses from the drop in DWS's long position.| American Express vs. Visa Class A | American Express vs. RLJ Lodging Trust | American Express vs. Aquagold International | American Express vs. Stepstone Group |
| DWS vs. DBX ETF Trust | DWS vs. Xtrackers SP 500 | DWS vs. TrueShares Structured Outcome | DWS vs. iShares ESG Screened |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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