Correlation Between American Express and Cambria Trinity
Can any of the company-specific risk be diversified away by investing in both American Express and Cambria Trinity 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 Cambria Trinity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Cambria Trinity ETF, you can compare the effects of market volatilities on American Express and Cambria Trinity 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 Cambria Trinity. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Cambria Trinity.
Diversification Opportunities for American Express and Cambria Trinity
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Cambria is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Cambria Trinity ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambria Trinity ETF 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 Cambria Trinity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambria Trinity ETF has no effect on the direction of American Express i.e., American Express and Cambria Trinity go up and down completely randomly.
Pair Corralation between American Express and Cambria Trinity
Considering the 90-day investment horizon American Express is expected to generate 2.59 times more return on investment than Cambria Trinity. However, American Express is 2.59 times more volatile than Cambria Trinity ETF. It trades about 0.12 of its potential returns per unit of risk. Cambria Trinity ETF is currently generating about 0.06 per unit of risk. If you would invest 17,030 in American Express on September 2, 2024 and sell it today you would earn a total of 13,438 from holding American Express or generate 78.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. Cambria Trinity ETF
Performance |
| Timeline |
| American Express |
| Cambria Trinity ETF |
American Express and Cambria Trinity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Cambria Trinity
The main advantage of trading using opposite American Express and Cambria Trinity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Cambria Trinity 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 Cambria Trinity will offset losses from the drop in Cambria Trinity's long position.| American Express vs. 360 Finance | American Express vs. Atlanticus Holdings | American Express vs. Qudian Inc | American Express vs. Enova International |
| Cambria Trinity vs. Cambria Global Asset | Cambria Trinity vs. Cambria Global Momentum | Cambria Trinity vs. Cambria Emerging Shareholder | Cambria Trinity vs. Cambria Value and |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |