Correlation Between American Express and WELLPOINT
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By analyzing existing cross correlation between American Express and WELLPOINT INC 465, you can compare the effects of market volatilities on American Express and WELLPOINT 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 WELLPOINT. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and WELLPOINT.
Diversification Opportunities for American Express and WELLPOINT
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and WELLPOINT is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding American Express and WELLPOINT INC 465 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WELLPOINT INC 465 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 WELLPOINT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WELLPOINT INC 465 has no effect on the direction of American Express i.e., American Express and WELLPOINT go up and down completely randomly.
Pair Corralation between American Express and WELLPOINT
Considering the 90-day investment horizon American Express is expected to generate 1.72 times more return on investment than WELLPOINT. However, American Express is 1.72 times more volatile than WELLPOINT INC 465. It trades about 0.29 of its potential returns per unit of risk. WELLPOINT INC 465 is currently generating about -0.1 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 | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
American Express vs. WELLPOINT INC 465
Performance |
| Timeline |
| American Express |
| WELLPOINT INC 465 |
American Express and WELLPOINT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and WELLPOINT
The main advantage of trading using opposite American Express and WELLPOINT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, WELLPOINT 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 WELLPOINT will offset losses from the drop in WELLPOINT's 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 |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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