Correlation Between American Express and XYLEM
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By analyzing existing cross correlation between American Express and XYLEM INC 325, you can compare the effects of market volatilities on American Express and XYLEM 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 XYLEM. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and XYLEM.
Diversification Opportunities for American Express and XYLEM
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and XYLEM is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding American Express and XYLEM INC 325 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XYLEM INC 325 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 XYLEM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XYLEM INC 325 has no effect on the direction of American Express i.e., American Express and XYLEM go up and down completely randomly.
Pair Corralation between American Express and XYLEM
Considering the 90-day investment horizon American Express is expected to generate 17.17 times less return on investment than XYLEM. But when comparing it to its historical volatility, American Express is 39.39 times less risky than XYLEM. It trades about 0.12 of its potential returns per unit of risk. XYLEM INC 325 is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 9,369 in XYLEM INC 325 on August 28, 2024 and sell it today you would earn a total of 89.00 from holding XYLEM INC 325 or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 85.88% |
| Values | Daily Returns |
American Express vs. XYLEM INC 325
Performance |
| Timeline |
| American Express |
| XYLEM INC 325 |
American Express and XYLEM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and XYLEM
The main advantage of trading using opposite American Express and XYLEM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, XYLEM 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 XYLEM will offset losses from the drop in XYLEM'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 |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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