Correlation Between American Express and Trek Resources
Can any of the company-specific risk be diversified away by investing in both American Express and Trek Resources 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 Trek Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Trek Resources, you can compare the effects of market volatilities on American Express and Trek Resources 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 Trek Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Trek Resources.
Diversification Opportunities for American Express and Trek Resources
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and Trek is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Trek Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trek Resources 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 Trek Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trek Resources has no effect on the direction of American Express i.e., American Express and Trek Resources go up and down completely randomly.
Pair Corralation between American Express and Trek Resources
If you would invest 27,008 in American Express on September 1, 2024 and sell it today you would earn a total of 3,460 from holding American Express or generate 12.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. Trek Resources
Performance |
| Timeline |
| American Express |
| Trek Resources |
American Express and Trek Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Trek Resources
The main advantage of trading using opposite American Express and Trek Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Trek Resources 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 Trek Resources will offset losses from the drop in Trek Resources' long position.| American Express vs. 360 Finance | American Express vs. Atlanticus Holdings | American Express vs. Qudian Inc | American Express vs. Enova International |
| Trek Resources vs. Permian Resources | Trek Resources vs. Devon Energy | Trek Resources vs. EOG Resources | Trek Resources vs. Coterra Energy |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |