Correlation Between American Express and Universal Media
Can any of the company-specific risk be diversified away by investing in both American Express and Universal Media 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 Universal Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Universal Media Group, you can compare the effects of market volatilities on American Express and Universal Media 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 Universal Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Universal Media.
Diversification Opportunities for American Express and Universal Media
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and Universal is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Universal Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Media Group 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 Universal Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Media Group has no effect on the direction of American Express i.e., American Express and Universal Media go up and down completely randomly.
Pair Corralation between American Express and Universal Media
Considering the 90-day investment horizon American Express is expected to generate 0.11 times more return on investment than Universal Media. However, American Express is 9.36 times less risky than Universal Media. It trades about 0.08 of its potential returns per unit of risk. Universal Media Group is currently generating about -0.02 per unit of risk. If you would invest 29,602 in American Express on October 9, 2024 and sell it today you would earn a total of 586.00 from holding American Express or generate 1.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. Universal Media Group
Performance |
| Timeline |
| American Express |
| Universal Media Group |
American Express and Universal Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Universal Media
The main advantage of trading using opposite American Express and Universal Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Universal Media 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 Universal Media will offset losses from the drop in Universal Media's long position.| American Express vs. Visa Class A | American Express vs. PayPal Holdings | American Express vs. Capital One Financial | American Express vs. Mastercard |
| Universal Media vs. Bilibili | Universal Media vs. Motorsport Gaming Us | Universal Media vs. Franklin Wireless Corp | Universal Media vs. Ainsworth Game Technology |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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