Correlation Between American Express and SHP ETF
Can any of the company-specific risk be diversified away by investing in both American Express and SHP ETF 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 SHP ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and SHP ETF Trust, you can compare the effects of market volatilities on American Express and SHP ETF 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 SHP ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and SHP ETF.
Diversification Opportunities for American Express and SHP ETF
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and SHP is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding American Express and SHP ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHP ETF Trust 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 SHP ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHP ETF Trust has no effect on the direction of American Express i.e., American Express and SHP ETF go up and down completely randomly.
Pair Corralation between American Express and SHP ETF
Considering the 90-day investment horizon American Express is expected to generate 3.43 times more return on investment than SHP ETF. However, American Express is 3.43 times more volatile than SHP ETF Trust. It trades about 0.27 of its potential returns per unit of risk. SHP ETF Trust is currently generating about 0.2 per unit of risk. If you would invest 27,147 in American Express on August 29, 2024 and sell it today you would earn a total of 3,278 from holding American Express or generate 12.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. SHP ETF Trust
Performance |
| Timeline |
| American Express |
| SHP ETF Trust |
American Express and SHP ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and SHP ETF
The main advantage of trading using opposite American Express and SHP ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, SHP ETF 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 SHP ETF will offset losses from the drop in SHP ETF's long position.| American Express vs. Visa Class A | American Express vs. Mastercard | American Express vs. Discover Financial Services |
| SHP ETF vs. Global X SP | SHP ETF vs. Amplify CWP Enhanced | SHP ETF vs. Global X Russell | SHP ETF vs. JPMorgan Nasdaq Equity |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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