Correlation Between American Express and ZOETIS
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By analyzing existing cross correlation between American Express and ZOETIS INC 47, you can compare the effects of market volatilities on American Express and ZOETIS 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 ZOETIS. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and ZOETIS.
Diversification Opportunities for American Express and ZOETIS
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and ZOETIS is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding American Express and ZOETIS INC 47 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZOETIS INC 47 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 ZOETIS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZOETIS INC 47 has no effect on the direction of American Express i.e., American Express and ZOETIS go up and down completely randomly.
Pair Corralation between American Express and ZOETIS
Considering the 90-day investment horizon American Express is expected to generate 2.14 times more return on investment than ZOETIS. However, American Express is 2.14 times more volatile than ZOETIS INC 47. It trades about 0.14 of its potential returns per unit of risk. ZOETIS INC 47 is currently generating about 0.02 per unit of risk. If you would invest 23,338 in American Express on September 3, 2024 and sell it today you would earn a total of 7,130 from holding American Express or generate 30.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 82.4% |
| Values | Daily Returns |
American Express vs. ZOETIS INC 47
Performance |
| Timeline |
| American Express |
| ZOETIS INC 47 |
American Express and ZOETIS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and ZOETIS
The main advantage of trading using opposite American Express and ZOETIS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, ZOETIS 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 ZOETIS will offset losses from the drop in ZOETIS's long position.| American Express vs. Highway Holdings Limited | American Express vs. QCR Holdings | American Express vs. Partner Communications | American Express vs. Acumen Pharmaceuticals |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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