Correlation Between American Express and Innovator Capital
Can any of the company-specific risk be diversified away by investing in both American Express and Innovator Capital 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 Innovator Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Innovator Capital Management, you can compare the effects of market volatilities on American Express and Innovator Capital 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 Innovator Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Innovator Capital.
Diversification Opportunities for American Express and Innovator Capital
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Innovator is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Innovator Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator Capital 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 Innovator Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator Capital has no effect on the direction of American Express i.e., American Express and Innovator Capital go up and down completely randomly.
Pair Corralation between American Express and Innovator Capital
If you would invest 27,269 in American Express on September 2, 2024 and sell it today you would earn a total of 3,199 from holding American Express or generate 11.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.76% |
| Values | Daily Returns |
American Express vs. Innovator Capital Management
Performance |
| Timeline |
| American Express |
| Innovator Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Express and Innovator Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Innovator Capital
The main advantage of trading using opposite American Express and Innovator Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Innovator Capital 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 Innovator Capital will offset losses from the drop in Innovator Capital's long position.| American Express vs. 360 Finance | American Express vs. Atlanticus Holdings | American Express vs. Qudian Inc | American Express vs. Enova International |
| Innovator Capital vs. ProShares VIX Mid Term | Innovator Capital vs. iPath Series B | Innovator Capital vs. ProShares Short Russell2000 |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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