Correlation Between American Express and REYNOLDS
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By analyzing existing cross correlation between American Express and REYNOLDS AMERN INC, you can compare the effects of market volatilities on American Express and REYNOLDS 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 REYNOLDS. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and REYNOLDS.
Diversification Opportunities for American Express and REYNOLDS
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and REYNOLDS is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding American Express and REYNOLDS AMERN INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REYNOLDS AMERN 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 REYNOLDS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REYNOLDS AMERN INC has no effect on the direction of American Express i.e., American Express and REYNOLDS go up and down completely randomly.
Pair Corralation between American Express and REYNOLDS
Considering the 90-day investment horizon American Express is expected to generate 4.54 times more return on investment than REYNOLDS. However, American Express is 4.54 times more volatile than REYNOLDS AMERN INC. It trades about 0.25 of its potential returns per unit of risk. REYNOLDS AMERN INC is currently generating about -0.18 per unit of risk. If you would invest 27,408 in American Express on August 31, 2024 and sell it today you would earn a total of 3,017 from holding American Express or generate 11.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
American Express vs. REYNOLDS AMERN INC
Performance |
| Timeline |
| American Express |
| REYNOLDS AMERN INC |
American Express and REYNOLDS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and REYNOLDS
The main advantage of trading using opposite American Express and REYNOLDS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, REYNOLDS 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 REYNOLDS will offset losses from the drop in REYNOLDS's long position.| American Express vs. Visa Class A | American Express vs. RLJ Lodging Trust | American Express vs. Aquagold International | American Express vs. Stepstone Group |
| REYNOLDS vs. AEP TEX INC | REYNOLDS vs. US BANK NATIONAL | REYNOLDS vs. Bank of America | REYNOLDS vs. GE Aerospace |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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