Correlation Between American Express and AMAZONCOM
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By analyzing existing cross correlation between American Express and AMAZONCOM INC, you can compare the effects of market volatilities on American Express and AMAZONCOM 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 AMAZONCOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and AMAZONCOM.
Diversification Opportunities for American Express and AMAZONCOM
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and AMAZONCOM is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding American Express and AMAZONCOM INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMAZONCOM INC 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 AMAZONCOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMAZONCOM INC has no effect on the direction of American Express i.e., American Express and AMAZONCOM go up and down completely randomly.
Pair Corralation between American Express and AMAZONCOM
Considering the 90-day investment horizon American Express is expected to generate 1.28 times less return on investment than AMAZONCOM. But when comparing it to its historical volatility, American Express is 1.52 times less risky than AMAZONCOM. It trades about 0.25 of its potential returns per unit of risk. AMAZONCOM INC is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 5,988 in AMAZONCOM INC on August 31, 2024 and sell it today you would earn a total of 828.00 from holding AMAZONCOM INC or generate 13.83% 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. AMAZONCOM INC
Performance |
| Timeline |
| American Express |
| AMAZONCOM INC |
American Express and AMAZONCOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and AMAZONCOM
The main advantage of trading using opposite American Express and AMAZONCOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, AMAZONCOM 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 AMAZONCOM will offset losses from the drop in AMAZONCOM'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 |
| AMAZONCOM vs. AEP TEX INC | AMAZONCOM vs. US BANK NATIONAL | AMAZONCOM vs. Bank of America | AMAZONCOM vs. GE Aerospace |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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