Correlation Between American Express and Sizzle Acquisition
Can any of the company-specific risk be diversified away by investing in both American Express and Sizzle Acquisition 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 Sizzle Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Sizzle Acquisition Corp, you can compare the effects of market volatilities on American Express and Sizzle Acquisition 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 Sizzle Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Sizzle Acquisition.
Diversification Opportunities for American Express and Sizzle Acquisition
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Sizzle is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Sizzle Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sizzle Acquisition Corp 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 Sizzle Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sizzle Acquisition Corp has no effect on the direction of American Express i.e., American Express and Sizzle Acquisition go up and down completely randomly.
Pair Corralation between American Express and Sizzle Acquisition
Considering the 90-day investment horizon American Express is expected to generate 3.73 times more return on investment than Sizzle Acquisition. However, American Express is 3.73 times more volatile than Sizzle Acquisition Corp. It trades about 0.11 of its potential returns per unit of risk. Sizzle Acquisition Corp is currently generating about 0.24 per unit of risk. If you would invest 17,430 in American Express on September 12, 2024 and sell it today you would earn a total of 12,781 from holding American Express or generate 73.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 1.14% |
| Values | Daily Returns |
American Express vs. Sizzle Acquisition Corp
Performance |
| Timeline |
| American Express |
| Sizzle Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Express and Sizzle Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Sizzle Acquisition
The main advantage of trading using opposite American Express and Sizzle Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Sizzle Acquisition 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 Sizzle Acquisition will offset losses from the drop in Sizzle Acquisition's long position.| American Express vs. Victory Integrity Smallmid Cap | American Express vs. Hilton Worldwide Holdings | American Express vs. NVIDIA | American Express vs. JPMorgan Chase Co |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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