Correlation Between American Express and 437076AU6
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By analyzing existing cross correlation between American Express and HOME DEPOT INC, you can compare the effects of market volatilities on American Express and 437076AU6 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 437076AU6. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and 437076AU6.
Diversification Opportunities for American Express and 437076AU6
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and 437076AU6 is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding American Express and HOME DEPOT INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOME DEPOT INC 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 437076AU6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HOME DEPOT INC has no effect on the direction of American Express i.e., American Express and 437076AU6 go up and down completely randomly.
Pair Corralation between American Express and 437076AU6
Considering the 90-day investment horizon American Express is expected to under-perform the 437076AU6. But the stock apears to be less risky and, when comparing its historical volatility, American Express is 1.02 times less risky than 437076AU6. The stock trades about -0.02 of its potential returns per unit of risk. The HOME DEPOT INC is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 9,946 in HOME DEPOT INC on November 18, 2024 and sell it today you would earn a total of 243.00 from holding HOME DEPOT INC or generate 2.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
American Express vs. HOME DEPOT INC
Performance |
| Timeline |
| American Express |
| HOME DEPOT INC |
American Express and 437076AU6 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and 437076AU6
The main advantage of trading using opposite American Express and 437076AU6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, 437076AU6 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 437076AU6 will offset losses from the drop in 437076AU6's long position.| American Express vs. Visa Class A | American Express vs. PayPal Holdings | American Express vs. Capital One Financial | American Express vs. Upstart Holdings |
| 437076AU6 vs. AEP TEX INC | 437076AU6 vs. Bank of America | 437076AU6 vs. Dupont De Nemours | 437076AU6 vs. Pfizer 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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