Correlation Between American Express and FIRST
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By analyzing existing cross correlation between American Express and FIRST AMERN FINL, you can compare the effects of market volatilities on American Express and FIRST 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 FIRST. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and FIRST.
Diversification Opportunities for American Express and FIRST
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and FIRST is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding American Express and FIRST AMERN FINL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST AMERN FINL 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 FIRST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRST AMERN FINL has no effect on the direction of American Express i.e., American Express and FIRST go up and down completely randomly.
Pair Corralation between American Express and FIRST
Considering the 90-day investment horizon American Express is expected to generate 3.98 times more return on investment than FIRST. However, American Express is 3.98 times more volatile than FIRST AMERN FINL. It trades about 0.1 of its potential returns per unit of risk. FIRST AMERN FINL is currently generating about 0.01 per unit of risk. If you would invest 15,071 in American Express on August 28, 2024 and sell it today you would earn a total of 15,450 from holding American Express or generate 102.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 72.53% |
| Values | Daily Returns |
American Express vs. FIRST AMERN FINL
Performance |
| Timeline |
| American Express |
| FIRST AMERN FINL |
American Express and FIRST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and FIRST
The main advantage of trading using opposite American Express and FIRST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, FIRST 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 FIRST will offset losses from the drop in FIRST'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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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