Correlation Between American Express and VALERO
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By analyzing existing cross correlation between American Express and VALERO ENERGY P, you can compare the effects of market volatilities on American Express and VALERO 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 VALERO. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and VALERO.
Diversification Opportunities for American Express and VALERO
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and VALERO is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding American Express and VALERO ENERGY P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VALERO ENERGY 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 VALERO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VALERO ENERGY P has no effect on the direction of American Express i.e., American Express and VALERO go up and down completely randomly.
Pair Corralation between American Express and VALERO
Considering the 90-day investment horizon American Express is expected to generate 2.73 times more return on investment than VALERO. However, American Express is 2.73 times more volatile than VALERO ENERGY P. It trades about 0.19 of its potential returns per unit of risk. VALERO ENERGY P is currently generating about 0.06 per unit of risk. If you would invest 27,123 in American Express on August 24, 2024 and sell it today you would earn a total of 2,177 from holding American Express or generate 8.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
American Express vs. VALERO ENERGY P
Performance |
| Timeline |
| American Express |
| VALERO ENERGY P |
American Express and VALERO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and VALERO
The main advantage of trading using opposite American Express and VALERO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, VALERO 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 VALERO will offset losses from the drop in VALERO's long position.| American Express vs. Visa Class A | American Express vs. Mastercard | American Express vs. SoFi Technologies | American Express vs. Coca Cola Consolidated |
| VALERO vs. Lendlease Global Commercial | VALERO vs. Willscot Mobile Mini | VALERO vs. Red Branch Technologies | VALERO vs. Usio Inc |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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