Correlation Between American Express and Scotts
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By analyzing existing cross correlation between American Express and Scotts Miracle Gro 525, you can compare the effects of market volatilities on American Express and Scotts 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 Scotts. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Scotts.
Diversification Opportunities for American Express and Scotts
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and Scotts is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Scotts Miracle Gro 525 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scotts Miracle Gro 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 Scotts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scotts Miracle Gro has no effect on the direction of American Express i.e., American Express and Scotts go up and down completely randomly.
Pair Corralation between American Express and Scotts
Considering the 90-day investment horizon American Express is expected to generate 2.32 times more return on investment than Scotts. However, American Express is 2.32 times more volatile than Scotts Miracle Gro 525. It trades about 0.29 of its potential returns per unit of risk. Scotts Miracle Gro 525 is currently generating about -0.12 per unit of risk. If you would invest 27,147 in American Express on August 28, 2024 and sell it today you would earn a total of 3,410 from holding American Express or generate 12.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
American Express vs. Scotts Miracle Gro 525
Performance |
| Timeline |
| American Express |
| Scotts Miracle Gro |
American Express and Scotts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Scotts
The main advantage of trading using opposite American Express and Scotts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Scotts 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 Scotts will offset losses from the drop in Scotts' 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 |
| Scotts vs. The Coca Cola | Scotts vs. JPMorgan Chase Co | Scotts vs. Dupont De Nemours | Scotts vs. Alcoa Corp |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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