Correlation Between American Express and GOODYEAR
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By analyzing existing cross correlation between American Express and GOODYEAR TIRE RUBR, you can compare the effects of market volatilities on American Express and GOODYEAR 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 GOODYEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and GOODYEAR.
Diversification Opportunities for American Express and GOODYEAR
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and GOODYEAR is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding American Express and GOODYEAR TIRE RUBR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOODYEAR TIRE RUBR 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 GOODYEAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOODYEAR TIRE RUBR has no effect on the direction of American Express i.e., American Express and GOODYEAR go up and down completely randomly.
Pair Corralation between American Express and GOODYEAR
Considering the 90-day investment horizon American Express is expected to generate 1.19 times more return on investment than GOODYEAR. However, American Express is 1.19 times more volatile than GOODYEAR TIRE RUBR. It trades about 0.12 of its potential returns per unit of risk. GOODYEAR TIRE RUBR is currently generating about 0.01 per unit of risk. If you would invest 16,842 in American Express on September 1, 2024 and sell it today you would earn a total of 13,626 from holding American Express or generate 80.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.85% |
| Values | Daily Returns |
American Express vs. GOODYEAR TIRE RUBR
Performance |
| Timeline |
| American Express |
| GOODYEAR TIRE RUBR |
American Express and GOODYEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and GOODYEAR
The main advantage of trading using opposite American Express and GOODYEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, GOODYEAR 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 GOODYEAR will offset losses from the drop in GOODYEAR's long position.| American Express vs. 360 Finance | American Express vs. Atlanticus Holdings | American Express vs. Qudian Inc | American Express vs. Enova International |
| GOODYEAR vs. Grupo Televisa SAB | GOODYEAR vs. Thor Industries | GOODYEAR vs. Marine Products | GOODYEAR vs. BCE Inc |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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