Correlation Between American Express and VCLO
Can any of the company-specific risk be diversified away by investing in both American Express and VCLO 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 VCLO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and VCLO, you can compare the effects of market volatilities on American Express and VCLO 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 VCLO. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and VCLO.
Diversification Opportunities for American Express and VCLO
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and VCLO is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding American Express and VCLO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VCLO 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 VCLO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VCLO has no effect on the direction of American Express i.e., American Express and VCLO go up and down completely randomly.
Pair Corralation between American Express and VCLO
If you would invest 27,147 in American Express on August 29, 2024 and sell it today you would earn a total of 3,278 from holding American Express or generate 12.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
American Express vs. VCLO
Performance |
| Timeline |
| American Express |
| VCLO |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Express and VCLO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and VCLO
The main advantage of trading using opposite American Express and VCLO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, VCLO 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 VCLO will offset losses from the drop in VCLO's long position.| American Express vs. Visa Class A | American Express vs. Mastercard | American Express vs. Discover Financial Services |
| VCLO vs. Nexalin Technology | VCLO vs. Kilroy Realty Corp | VCLO vs. Highwoods Properties | VCLO vs. Karat Packaging |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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