Correlation Between American Express and VERIZON
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By analyzing existing cross correlation between American Express and VERIZON MUNICATIONS INC, you can compare the effects of market volatilities on American Express and VERIZON 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 VERIZON. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and VERIZON.
Diversification Opportunities for American Express and VERIZON
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and VERIZON is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding American Express and VERIZON MUNICATIONS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VERIZON MUNICATIONS 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 VERIZON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VERIZON MUNICATIONS INC has no effect on the direction of American Express i.e., American Express and VERIZON go up and down completely randomly.
Pair Corralation between American Express and VERIZON
Considering the 90-day investment horizon American Express is expected to generate 1.03 times less return on investment than VERIZON. But when comparing it to its historical volatility, American Express is 2.57 times less risky than VERIZON. It trades about 0.19 of its potential returns per unit of risk. VERIZON MUNICATIONS INC is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 7,933 in VERIZON MUNICATIONS INC on August 24, 2024 and sell it today you would earn a total of 464.00 from holding VERIZON MUNICATIONS INC or generate 5.85% 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. VERIZON MUNICATIONS INC
Performance |
| Timeline |
| American Express |
| VERIZON MUNICATIONS INC |
American Express and VERIZON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and VERIZON
The main advantage of trading using opposite American Express and VERIZON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, VERIZON 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 VERIZON will offset losses from the drop in VERIZON's long position.| American Express vs. Small Cap Core | American Express vs. Morningstar Unconstrained Allocation | American Express vs. Mutual Of America | American Express vs. Ep Emerging Markets |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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