Correlation Between American Express and 126650DL1
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By analyzing existing cross correlation between American Express and CVS HEALTH P, you can compare the effects of market volatilities on American Express and 126650DL1 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 126650DL1. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and 126650DL1.
Diversification Opportunities for American Express and 126650DL1
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and 126650DL1 is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding American Express and CVS HEALTH P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVS HEALTH P 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 126650DL1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVS HEALTH P has no effect on the direction of American Express i.e., American Express and 126650DL1 go up and down completely randomly.
Pair Corralation between American Express and 126650DL1
Considering the 90-day investment horizon American Express is expected to generate 1.01 times less return on investment than 126650DL1. But when comparing it to its historical volatility, American Express is 1.26 times less risky than 126650DL1. It trades about 0.24 of its potential returns per unit of risk. CVS HEALTH P is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 7,585 in CVS HEALTH P on August 24, 2024 and sell it today you would earn a total of 753.00 from holding CVS HEALTH P or generate 9.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
American Express vs. CVS HEALTH P
Performance |
| Timeline |
| American Express |
| CVS HEALTH P |
American Express and 126650DL1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and 126650DL1
The main advantage of trading using opposite American Express and 126650DL1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, 126650DL1 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 126650DL1 will offset losses from the drop in 126650DL1's long position.| American Express vs. Visa Class A | American Express vs. Mastercard | American Express vs. SoFi Technologies | American Express vs. Coca Cola Consolidated |
| 126650DL1 vs. The Coca Cola | 126650DL1 vs. JPMorgan Chase Co | 126650DL1 vs. Dupont De Nemours | 126650DL1 vs. Alcoa Corp |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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