Correlation Between American Express and VelocityShares
Can any of the company-specific risk be diversified away by investing in both American Express and VelocityShares at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining American Express and VelocityShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and VelocityShares 3x Long, you can compare the effects of market volatilities on American Express and VelocityShares 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 VelocityShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and VelocityShares.
Diversification Opportunities for American Express and VelocityShares
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and VelocityShares is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding American Express and VelocityShares 3x Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VelocityShares 3x Long 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 VelocityShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VelocityShares 3x Long has no effect on the direction of American Express i.e., American Express and VelocityShares go up and down completely randomly.
Pair Corralation between American Express and VelocityShares
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 | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
American Express vs. VelocityShares 3x Long
Performance |
| Timeline |
| American Express |
| VelocityShares 3x Long |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Express and VelocityShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and VelocityShares
The main advantage of trading using opposite American Express and VelocityShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, VelocityShares 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 VelocityShares will offset losses from the drop in VelocityShares' 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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