Correlation Between American Express and KRAFT
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By analyzing existing cross correlation between American Express and KRAFT FOODS GROUP, you can compare the effects of market volatilities on American Express and KRAFT 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 KRAFT. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and KRAFT.
Diversification Opportunities for American Express and KRAFT
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and KRAFT is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding American Express and KRAFT FOODS GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KRAFT FOODS GROUP 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 KRAFT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KRAFT FOODS GROUP has no effect on the direction of American Express i.e., American Express and KRAFT go up and down completely randomly.
Pair Corralation between American Express and KRAFT
Considering the 90-day investment horizon American Express is expected to generate 1.6 times more return on investment than KRAFT. However, American Express is 1.6 times more volatile than KRAFT FOODS GROUP. It trades about 0.17 of its potential returns per unit of risk. KRAFT FOODS GROUP is currently generating about 0.14 per unit of risk. If you would invest 30,308 in American Express on November 4, 2024 and sell it today you would earn a total of 1,437 from holding American Express or generate 4.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
American Express vs. KRAFT FOODS GROUP
Performance |
| Timeline |
| American Express |
| KRAFT FOODS GROUP |
American Express and KRAFT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and KRAFT
The main advantage of trading using opposite American Express and KRAFT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, KRAFT 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 KRAFT will offset losses from the drop in KRAFT's long position.| American Express vs. 360 Finance | American Express vs. Atlanticus Holdings | American Express vs. Qudian Inc | American Express vs. Enova International |
| KRAFT vs. AEP TEX INC | KRAFT vs. US BANK NATIONAL | KRAFT vs. Valley National Bancorp | KRAFT vs. LightPath Technologies |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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