Correlation Between American Express and Valuence Merger
Can any of the company-specific risk be diversified away by investing in both American Express and Valuence Merger 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 Valuence Merger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Valuence Merger Corp, you can compare the effects of market volatilities on American Express and Valuence Merger 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 Valuence Merger. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Valuence Merger.
Diversification Opportunities for American Express and Valuence Merger
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Valuence is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Valuence Merger Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valuence Merger Corp 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 Valuence Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valuence Merger Corp has no effect on the direction of American Express i.e., American Express and Valuence Merger go up and down completely randomly.
Pair Corralation between American Express and Valuence Merger
Considering the 90-day investment horizon American Express is expected to generate 0.98 times more return on investment than Valuence Merger. However, American Express is 1.02 times less risky than Valuence Merger. It trades about 0.12 of its potential returns per unit of risk. Valuence Merger Corp is currently generating about 0.02 per unit of risk. If you would invest 21,014 in American Express on November 5, 2024 and sell it today you would earn a total of 10,731 from holding American Express or generate 51.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. Valuence Merger Corp
Performance |
| Timeline |
| American Express |
| Valuence Merger Corp |
American Express and Valuence Merger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Valuence Merger
The main advantage of trading using opposite American Express and Valuence Merger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Valuence Merger 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 Valuence Merger will offset losses from the drop in Valuence Merger's long position.| American Express vs. 360 Finance | American Express vs. Atlanticus Holdings | American Express vs. Qudian Inc | American Express vs. Enova International |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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