Correlation Between American Express and Franklin Exponential
Can any of the company-specific risk be diversified away by investing in both American Express and Franklin Exponential 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 Franklin Exponential into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Franklin Exponential Data, you can compare the effects of market volatilities on American Express and Franklin Exponential 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 Franklin Exponential. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Franklin Exponential.
Diversification Opportunities for American Express and Franklin Exponential
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Franklin is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Franklin Exponential Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Exponential Data 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 Franklin Exponential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Exponential Data has no effect on the direction of American Express i.e., American Express and Franklin Exponential go up and down completely randomly.
Pair Corralation between American Express and Franklin Exponential
Considering the 90-day investment horizon American Express is expected to generate 1.49 times more return on investment than Franklin Exponential. However, American Express is 1.49 times more volatile than Franklin Exponential Data. It trades about 0.27 of its potential returns per unit of risk. Franklin Exponential Data is currently generating about 0.32 per unit of risk. If you would invest 27,147 in American Express on August 29, 2024 and sell it today you would earn a total of 3,294 from holding American Express or generate 12.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. Franklin Exponential Data
Performance |
| Timeline |
| American Express |
| Franklin Exponential Data |
American Express and Franklin Exponential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Franklin Exponential
The main advantage of trading using opposite American Express and Franklin Exponential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Franklin Exponential 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 Franklin Exponential will offset losses from the drop in Franklin Exponential's long position.| American Express vs. Visa Class A | American Express vs. Mastercard | American Express vs. Discover Financial Services |
| Franklin Exponential vs. Franklin Disruptive Commerce | Franklin Exponential vs. Franklin Templeton ETF | Franklin Exponential vs. Esoterica NextG Economy | Franklin Exponential vs. TrueShares Technology AI |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |