Correlation Between American Express and DEERE
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By analyzing existing cross correlation between American Express and DEERE CO, you can compare the effects of market volatilities on American Express and DEERE 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 DEERE. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and DEERE.
Diversification Opportunities for American Express and DEERE
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and DEERE is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding American Express and DEERE CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DEERE 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 DEERE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DEERE CO has no effect on the direction of American Express i.e., American Express and DEERE go up and down completely randomly.
Pair Corralation between American Express and DEERE
Considering the 90-day investment horizon American Express is expected to generate 1.71 times more return on investment than DEERE. However, American Express is 1.71 times more volatile than DEERE CO. It trades about 0.25 of its potential returns per unit of risk. DEERE CO is currently generating about -0.08 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 | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
American Express vs. DEERE CO
Performance |
| Timeline |
| American Express |
| DEERE CO |
American Express and DEERE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and DEERE
The main advantage of trading using opposite American Express and DEERE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, DEERE 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 DEERE will offset losses from the drop in DEERE'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 |
| DEERE vs. Old Republic International | DEERE vs. Vita Coco | DEERE vs. Thai Beverage PCL | DEERE vs. Compania Cervecerias Unidas |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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