Correlation Between American Express and SPIRIT
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By analyzing existing cross correlation between American Express and SPIRIT RLTY L, you can compare the effects of market volatilities on American Express and SPIRIT 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 SPIRIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and SPIRIT.
Diversification Opportunities for American Express and SPIRIT
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and SPIRIT is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding American Express and SPIRIT RLTY L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPIRIT RLTY L 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 SPIRIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPIRIT RLTY L has no effect on the direction of American Express i.e., American Express and SPIRIT go up and down completely randomly.
Pair Corralation between American Express and SPIRIT
Considering the 90-day investment horizon American Express is expected to generate 1.68 times more return on investment than SPIRIT. However, American Express is 1.68 times more volatile than SPIRIT RLTY L. It trades about 0.18 of its potential returns per unit of risk. SPIRIT RLTY L is currently generating about 0.0 per unit of risk. If you would invest 25,365 in American Express on September 3, 2024 and sell it today you would earn a total of 5,103 from holding American Express or generate 20.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 21.88% |
| Values | Daily Returns |
American Express vs. SPIRIT RLTY L
Performance |
| Timeline |
| American Express |
| SPIRIT RLTY L |
American Express and SPIRIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and SPIRIT
The main advantage of trading using opposite American Express and SPIRIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, SPIRIT 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 SPIRIT will offset losses from the drop in SPIRIT's long position.| American Express vs. Highway Holdings Limited | American Express vs. QCR Holdings | American Express vs. Partner Communications | American Express vs. Acumen Pharmaceuticals |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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