Correlation Between American Express and Traction Uranium
Can any of the company-specific risk be diversified away by investing in both American Express and Traction Uranium 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 Traction Uranium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Traction Uranium Corp, you can compare the effects of market volatilities on American Express and Traction Uranium 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 Traction Uranium. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Traction Uranium.
Diversification Opportunities for American Express and Traction Uranium
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Traction is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Traction Uranium Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Traction Uranium 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 Traction Uranium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Traction Uranium Corp has no effect on the direction of American Express i.e., American Express and Traction Uranium go up and down completely randomly.
Pair Corralation between American Express and Traction Uranium
Considering the 90-day investment horizon American Express is expected to generate 10.25 times less return on investment than Traction Uranium. But when comparing it to its historical volatility, American Express is 29.54 times less risky than Traction Uranium. It trades about 0.1 of its potential returns per unit of risk. Traction Uranium Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 322.00 in Traction Uranium Corp on September 3, 2024 and sell it today you would lose (301.00) from holding Traction Uranium Corp or give up 93.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.58% |
| Values | Daily Returns |
American Express vs. Traction Uranium Corp
Performance |
| Timeline |
| American Express |
| Traction Uranium Corp |
American Express and Traction Uranium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Traction Uranium
The main advantage of trading using opposite American Express and Traction Uranium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Traction Uranium 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 Traction Uranium will offset losses from the drop in Traction Uranium's long position.| American Express vs. Highway Holdings Limited | American Express vs. QCR Holdings | American Express vs. Partner Communications | American Express vs. Acumen Pharmaceuticals |
| Traction Uranium vs. New Age Metals | Traction Uranium vs. York Harbour Metals | Traction Uranium vs. Silver Elephant Mining | Traction Uranium vs. First Energy Metals |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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