Correlation Between American Express and AMAZON
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By analyzing existing cross correlation between American Express and AMAZON INC 425, you can compare the effects of market volatilities on American Express and AMAZON 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 AMAZON. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and AMAZON.
Diversification Opportunities for American Express and AMAZON
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and AMAZON is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding American Express and AMAZON INC 425 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMAZON INC 425 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 AMAZON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMAZON INC 425 has no effect on the direction of American Express i.e., American Express and AMAZON go up and down completely randomly.
Pair Corralation between American Express and AMAZON
Considering the 90-day investment horizon American Express is expected to generate 1.62 times more return on investment than AMAZON. However, American Express is 1.62 times more volatile than AMAZON INC 425. It trades about 0.25 of its potential returns per unit of risk. AMAZON INC 425 is currently generating about 0.11 per unit of risk. If you would invest 27,408 in American Express on August 31, 2024 and sell it today you would earn a total of 3,017 from holding American Express or generate 11.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
American Express vs. AMAZON INC 425
Performance |
| Timeline |
| American Express |
| AMAZON INC 425 |
American Express and AMAZON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and AMAZON
The main advantage of trading using opposite American Express and AMAZON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, AMAZON 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 AMAZON will offset losses from the drop in AMAZON's long position.| American Express vs. Visa Class A | American Express vs. RLJ Lodging Trust | American Express vs. Aquagold International | American Express vs. Stepstone Group |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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