Correlation Between American Express and AETNA
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By analyzing existing cross correlation between American Express and AETNA INC NEW, you can compare the effects of market volatilities on American Express and AETNA 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 AETNA. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and AETNA.
Diversification Opportunities for American Express and AETNA
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and AETNA is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding American Express and AETNA INC NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AETNA INC NEW 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 AETNA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AETNA INC NEW has no effect on the direction of American Express i.e., American Express and AETNA go up and down completely randomly.
Pair Corralation between American Express and AETNA
Considering the 90-day investment horizon American Express is expected to generate 6.19 times more return on investment than AETNA. However, American Express is 6.19 times more volatile than AETNA INC NEW. It trades about 0.17 of its potential returns per unit of risk. AETNA INC NEW is currently generating about 0.02 per unit of risk. If you would invest 16,644 in American Express on September 3, 2024 and sell it today you would earn a total of 13,582 from holding American Express or generate 81.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
American Express vs. AETNA INC NEW
Performance |
| Timeline |
| American Express |
| AETNA INC NEW |
American Express and AETNA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and AETNA
The main advantage of trading using opposite American Express and AETNA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, AETNA 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 AETNA will offset losses from the drop in AETNA's long position.| American Express vs. Highway Holdings Limited | American Express vs. QCR Holdings | American Express vs. Partner Communications | American Express vs. Acumen Pharmaceuticals |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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