Correlation Between American Express and Taiyo Yuden
Can any of the company-specific risk be diversified away by investing in both American Express and Taiyo Yuden 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 Taiyo Yuden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Taiyo Yuden, you can compare the effects of market volatilities on American Express and Taiyo Yuden 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 Taiyo Yuden. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Taiyo Yuden.
Diversification Opportunities for American Express and Taiyo Yuden
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Taiyo is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Taiyo Yuden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiyo Yuden 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 Taiyo Yuden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiyo Yuden has no effect on the direction of American Express i.e., American Express and Taiyo Yuden go up and down completely randomly.
Pair Corralation between American Express and Taiyo Yuden
If you would invest 27,049 in American Express on August 30, 2024 and sell it today you would earn a total of 3,376 from holding American Express or generate 12.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 2.27% |
| Values | Daily Returns |
American Express vs. Taiyo Yuden
Performance |
| Timeline |
| American Express |
| Taiyo Yuden |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Express and Taiyo Yuden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Taiyo Yuden
The main advantage of trading using opposite American Express and Taiyo Yuden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Taiyo Yuden 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 Taiyo Yuden will offset losses from the drop in Taiyo Yuden's long position.| American Express vs. 360 Finance | American Express vs. Atlanticus Holdings | American Express vs. X Financial Class | American Express vs. Yirendai |
| Taiyo Yuden vs. Patterson UTI Energy | Taiyo Yuden vs. Western Copper and | Taiyo Yuden vs. Cementos Pacasmayo SAA | Taiyo Yuden vs. Eldorado Gold Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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