Correlation Between American Express and Ivy Science
Can any of the company-specific risk be diversified away by investing in both American Express and Ivy Science 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 Ivy Science into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Ivy Science And, you can compare the effects of market volatilities on American Express and Ivy Science 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 Ivy Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Ivy Science.
Diversification Opportunities for American Express and Ivy Science
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Ivy is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Ivy Science And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy Science And 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 Ivy Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy Science And has no effect on the direction of American Express i.e., American Express and Ivy Science go up and down completely randomly.
Pair Corralation between American Express and Ivy Science
Considering the 90-day investment horizon American Express is expected to generate 1.5 times more return on investment than Ivy Science. However, American Express is 1.5 times more volatile than Ivy Science And. It trades about 0.19 of its potential returns per unit of risk. Ivy Science And is currently generating about 0.03 per unit of risk. If you would invest 27,123 in American Express on August 24, 2024 and sell it today you would earn a total of 2,177 from holding American Express or generate 8.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
American Express vs. Ivy Science And
Performance |
| Timeline |
| American Express |
| Ivy Science And |
American Express and Ivy Science Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Ivy Science
The main advantage of trading using opposite American Express and Ivy Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Ivy Science 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 Ivy Science will offset losses from the drop in Ivy Science's long position.| American Express vs. Visa Class A | American Express vs. Mastercard | American Express vs. SoFi Technologies | American Express vs. Coca Cola Consolidated |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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