Correlation Between American Express and ENBRIDGE
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By analyzing existing cross correlation between American Express and ENBRIDGE INC 425, you can compare the effects of market volatilities on American Express and ENBRIDGE 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 ENBRIDGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and ENBRIDGE.
Diversification Opportunities for American Express and ENBRIDGE
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and ENBRIDGE is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding American Express and ENBRIDGE INC 425 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENBRIDGE INC 425 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 ENBRIDGE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENBRIDGE INC 425 has no effect on the direction of American Express i.e., American Express and ENBRIDGE go up and down completely randomly.
Pair Corralation between American Express and ENBRIDGE
Considering the 90-day investment horizon American Express is expected to generate 4.75 times more return on investment than ENBRIDGE. However, American Express is 4.75 times more volatile than ENBRIDGE INC 425. It trades about 0.11 of its potential returns per unit of risk. ENBRIDGE INC 425 is currently generating about 0.01 per unit of risk. If you would invest 15,367 in American Express on November 1, 2024 and sell it today you would earn a total of 16,528 from holding American Express or generate 107.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
American Express vs. ENBRIDGE INC 425
Performance |
| Timeline |
| American Express |
| ENBRIDGE INC 425 |
American Express and ENBRIDGE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and ENBRIDGE
The main advantage of trading using opposite American Express and ENBRIDGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, ENBRIDGE 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 ENBRIDGE will offset losses from the drop in ENBRIDGE's long position.| American Express vs. Visa Class A | American Express vs. PayPal Holdings | American Express vs. Mastercard |
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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