Correlation Between American Express and Vtlxx
Can any of the company-specific risk be diversified away by investing in both American Express and Vtlxx 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 Vtlxx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Vtlxx, you can compare the effects of market volatilities on American Express and Vtlxx 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 Vtlxx. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Vtlxx.
Diversification Opportunities for American Express and Vtlxx
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and Vtlxx is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Vtlxx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vtlxx 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 Vtlxx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vtlxx has no effect on the direction of American Express i.e., American Express and Vtlxx go up and down completely randomly.
Pair Corralation between American Express and Vtlxx
Considering the 90-day investment horizon American Express is expected to generate 19.8 times less return on investment than Vtlxx. But when comparing it to its historical volatility, American Express is 43.46 times less risky than Vtlxx. It trades about 0.25 of its potential returns per unit of risk. Vtlxx is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 480.00 in Vtlxx on August 31, 2024 and sell it today you would lose (380.00) from holding Vtlxx or give up 79.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. Vtlxx
Performance |
| Timeline |
| American Express |
| Vtlxx |
American Express and Vtlxx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Vtlxx
The main advantage of trading using opposite American Express and Vtlxx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Vtlxx 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 Vtlxx will offset losses from the drop in Vtlxx's long position.| American Express vs. Visa Class A | American Express vs. RLJ Lodging Trust | American Express vs. Aquagold International | American Express vs. Stepstone Group |
| Vtlxx vs. Vanguard Total Stock | Vtlxx vs. Vanguard 500 Index | Vtlxx vs. Vanguard Total Stock | Vtlxx vs. Vanguard Total Stock |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |