Correlation Between American Express and OCCIDENTAL
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By analyzing existing cross correlation between American Express and OCCIDENTAL PETE P, you can compare the effects of market volatilities on American Express and OCCIDENTAL 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 OCCIDENTAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and OCCIDENTAL.
Diversification Opportunities for American Express and OCCIDENTAL
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and OCCIDENTAL is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding American Express and OCCIDENTAL PETE P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OCCIDENTAL PETE P 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 OCCIDENTAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OCCIDENTAL PETE P has no effect on the direction of American Express i.e., American Express and OCCIDENTAL go up and down completely randomly.
Pair Corralation between American Express and OCCIDENTAL
Considering the 90-day investment horizon American Express is expected to generate 0.87 times more return on investment than OCCIDENTAL. However, American Express is 1.15 times less risky than OCCIDENTAL. It trades about 0.12 of its potential returns per unit of risk. OCCIDENTAL PETE P is currently generating about 0.01 per unit of risk. If you would invest 17,219 in American Express on August 28, 2024 and sell it today you would earn a total of 13,302 from holding American Express or generate 77.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 70.62% |
| Values | Daily Returns |
American Express vs. OCCIDENTAL PETE P
Performance |
| Timeline |
| American Express |
| OCCIDENTAL PETE P |
American Express and OCCIDENTAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and OCCIDENTAL
The main advantage of trading using opposite American Express and OCCIDENTAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, OCCIDENTAL 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 OCCIDENTAL will offset losses from the drop in OCCIDENTAL's long position.| American Express vs. Orix Corp Ads | American Express vs. Medallion Financial Corp | American Express vs. Oportun Financial Corp | American Express vs. SLM Corp Pb |
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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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