Correlation Between American Express and DIAGEO
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By analyzing existing cross correlation between American Express and DIAGEO CAP PLC, you can compare the effects of market volatilities on American Express and DIAGEO 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 DIAGEO. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and DIAGEO.
Diversification Opportunities for American Express and DIAGEO
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and DIAGEO is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding American Express and DIAGEO CAP PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIAGEO CAP PLC 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 DIAGEO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIAGEO CAP PLC has no effect on the direction of American Express i.e., American Express and DIAGEO go up and down completely randomly.
Pair Corralation between American Express and DIAGEO
Considering the 90-day investment horizon American Express is expected to generate 1.71 times more return on investment than DIAGEO. However, American Express is 1.71 times more volatile than DIAGEO CAP PLC. It trades about 0.17 of its potential returns per unit of risk. DIAGEO CAP PLC is currently generating about 0.02 per unit of risk. If you would invest 25,642 in American Express on August 28, 2024 and sell it today you would earn a total of 4,879 from holding American Express or generate 19.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 84.13% |
| Values | Daily Returns |
American Express vs. DIAGEO CAP PLC
Performance |
| Timeline |
| American Express |
| DIAGEO CAP PLC |
American Express and DIAGEO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and DIAGEO
The main advantage of trading using opposite American Express and DIAGEO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, DIAGEO 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 DIAGEO will offset losses from the drop in DIAGEO's long position.| American Express vs. SLM Corp | American Express vs. Orix Corp Ads | American Express vs. FirstCash | American Express vs. Medallion Financial Corp |
| DIAGEO vs. The Coca Cola | DIAGEO vs. JPMorgan Chase Co | DIAGEO vs. Dupont De Nemours | DIAGEO 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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