Correlation Between American Express and ANTHEM
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By analyzing existing cross correlation between American Express and ANTHEM INC, you can compare the effects of market volatilities on American Express and ANTHEM 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 ANTHEM. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and ANTHEM.
Diversification Opportunities for American Express and ANTHEM
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and ANTHEM is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding American Express and ANTHEM INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANTHEM 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 ANTHEM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANTHEM INC has no effect on the direction of American Express i.e., American Express and ANTHEM go up and down completely randomly.
Pair Corralation between American Express and ANTHEM
Considering the 90-day investment horizon American Express is expected to generate 1.36 times less return on investment than ANTHEM. But when comparing it to its historical volatility, American Express is 1.45 times less risky than ANTHEM. It trades about 0.25 of its potential returns per unit of risk. ANTHEM INC is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 6,667 in ANTHEM INC on August 31, 2024 and sell it today you would earn a total of 760.00 from holding ANTHEM INC or generate 11.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 77.27% |
| Values | Daily Returns |
American Express vs. ANTHEM INC
Performance |
| Timeline |
| American Express |
| ANTHEM INC |
American Express and ANTHEM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and ANTHEM
The main advantage of trading using opposite American Express and ANTHEM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, ANTHEM 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 ANTHEM will offset losses from the drop in ANTHEM'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 |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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