Correlation Between American Express and Touchstone ETF
Can any of the company-specific risk be diversified away by investing in both American Express and Touchstone ETF 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 Touchstone ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Touchstone ETF Trust, you can compare the effects of market volatilities on American Express and Touchstone ETF 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 Touchstone ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Touchstone ETF.
Diversification Opportunities for American Express and Touchstone ETF
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Touchstone is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Touchstone ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone ETF Trust 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 Touchstone ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone ETF Trust has no effect on the direction of American Express i.e., American Express and Touchstone ETF go up and down completely randomly.
Pair Corralation between American Express and Touchstone ETF
Considering the 90-day investment horizon American Express is expected to generate 16.31 times more return on investment than Touchstone ETF. However, American Express is 16.31 times more volatile than Touchstone ETF Trust. It trades about 0.22 of its potential returns per unit of risk. Touchstone ETF Trust is currently generating about 0.02 per unit of risk. If you would invest 29,773 in American Express on November 3, 2024 and sell it today you would earn a total of 1,972 from holding American Express or generate 6.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. Touchstone ETF Trust
Performance |
| Timeline |
| American Express |
| Touchstone ETF Trust |
American Express and Touchstone ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Touchstone ETF
The main advantage of trading using opposite American Express and Touchstone ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Touchstone ETF 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 Touchstone ETF will offset losses from the drop in Touchstone ETF's long position.| American Express vs. 360 Finance | American Express vs. Atlanticus Holdings | American Express vs. Qudian Inc | American Express vs. Enova International |
| Touchstone ETF vs. VanEck Vectors Moodys | Touchstone ETF vs. Valued Advisers Trust | Touchstone ETF vs. Xtrackers California Municipal | Touchstone ETF vs. Principal Exchange Traded Funds |
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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