Correlation Between American Express and 191216CY4
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By analyzing existing cross correlation between American Express and COCA COLA CO, you can compare the effects of market volatilities on American Express and 191216CY4 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 191216CY4. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and 191216CY4.
Diversification Opportunities for American Express and 191216CY4
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and 191216CY4 is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding American Express and COCA COLA CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COCA A CO 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 191216CY4. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COCA A CO has no effect on the direction of American Express i.e., American Express and 191216CY4 go up and down completely randomly.
Pair Corralation between American Express and 191216CY4
Considering the 90-day investment horizon American Express is expected to generate 57.54 times less return on investment than 191216CY4. But when comparing it to its historical volatility, American Express is 62.15 times less risky than 191216CY4. It trades about 0.09 of its potential returns per unit of risk. COCA COLA CO is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 7,177 in COCA COLA CO on August 26, 2024 and sell it today you would lose (1,146) from holding COCA COLA CO or give up 15.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 83.7% |
| Values | Daily Returns |
American Express vs. COCA COLA CO
Performance |
| Timeline |
| American Express |
| COCA A CO |
American Express and 191216CY4 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and 191216CY4
The main advantage of trading using opposite American Express and 191216CY4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, 191216CY4 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 191216CY4 will offset losses from the drop in 191216CY4's long position.| American Express vs. SLM Corp | American Express vs. Orix Corp Ads | American Express vs. FirstCash | American Express vs. Medallion Financial Corp |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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