Correlation Between American Express and THERMO
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By analyzing existing cross correlation between American Express and THERMO FISHER SCIENTIFIC, you can compare the effects of market volatilities on American Express and THERMO 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 THERMO. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and THERMO.
Diversification Opportunities for American Express and THERMO
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and THERMO is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding American Express and THERMO FISHER SCIENTIFIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THERMO FISHER SCIENTIFIC 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 THERMO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THERMO FISHER SCIENTIFIC has no effect on the direction of American Express i.e., American Express and THERMO go up and down completely randomly.
Pair Corralation between American Express and THERMO
Considering the 90-day investment horizon American Express is expected to generate 1.78 times more return on investment than THERMO. However, American Express is 1.78 times more volatile than THERMO FISHER SCIENTIFIC. It trades about 0.25 of its potential returns per unit of risk. THERMO FISHER SCIENTIFIC is currently generating about 0.11 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 | Insignificant |
| Accuracy | 77.27% |
| Values | Daily Returns |
American Express vs. THERMO FISHER SCIENTIFIC
Performance |
| Timeline |
| American Express |
| THERMO FISHER SCIENTIFIC |
American Express and THERMO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and THERMO
The main advantage of trading using opposite American Express and THERMO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, THERMO 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 THERMO will offset losses from the drop in THERMO'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 |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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