Correlation Between American Express and Steward Small-mid
Can any of the company-specific risk be diversified away by investing in both American Express and Steward Small-mid 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 Steward Small-mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Steward Small Mid Cap, you can compare the effects of market volatilities on American Express and Steward Small-mid 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 Steward Small-mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Steward Small-mid.
Diversification Opportunities for American Express and Steward Small-mid
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Steward is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Steward Small Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steward Small Mid 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 Steward Small-mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steward Small Mid has no effect on the direction of American Express i.e., American Express and Steward Small-mid go up and down completely randomly.
Pair Corralation between American Express and Steward Small-mid
Considering the 90-day investment horizon American Express is expected to under-perform the Steward Small-mid. In addition to that, American Express is 1.2 times more volatile than Steward Small Mid Cap. It trades about -0.31 of its total potential returns per unit of risk. Steward Small Mid Cap is currently generating about -0.28 per unit of volatility. If you would invest 1,146 in Steward Small Mid Cap on November 27, 2024 and sell it today you would lose (57.00) from holding Steward Small Mid Cap or give up 4.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. Steward Small Mid Cap
Performance |
| Timeline |
| American Express |
| Steward Small Mid |
American Express and Steward Small-mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Steward Small-mid
The main advantage of trading using opposite American Express and Steward Small-mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Steward Small-mid 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 Steward Small-mid will offset losses from the drop in Steward Small-mid's long position.| American Express vs. Visa Class A | American Express vs. PayPal Holdings | American Express vs. Capital One Financial | American Express vs. Upstart Holdings |
| Steward Small-mid vs. Ms Global Fixed | Steward Small-mid vs. T Rowe Price | Steward Small-mid vs. T Rowe Price | Steward Small-mid vs. T Rowe Price |
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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