Correlation Between American Express and GraniteShares XOUT
Can any of the company-specific risk be diversified away by investing in both American Express and GraniteShares XOUT 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 GraniteShares XOUT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and GraniteShares XOUT Large, you can compare the effects of market volatilities on American Express and GraniteShares XOUT 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 GraniteShares XOUT. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and GraniteShares XOUT.
Diversification Opportunities for American Express and GraniteShares XOUT
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and GraniteShares is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding American Express and GraniteShares XOUT Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares XOUT Large 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 GraniteShares XOUT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares XOUT Large has no effect on the direction of American Express i.e., American Express and GraniteShares XOUT go up and down completely randomly.
Pair Corralation between American Express and GraniteShares XOUT
Considering the 90-day investment horizon American Express is expected to generate 1.34 times more return on investment than GraniteShares XOUT. However, American Express is 1.34 times more volatile than GraniteShares XOUT Large. It trades about 0.13 of its potential returns per unit of risk. GraniteShares XOUT Large is currently generating about 0.09 per unit of risk. If you would invest 23,303 in American Express on September 3, 2024 and sell it today you would earn a total of 7,165 from holding American Express or generate 30.75% 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. GraniteShares XOUT Large
Performance |
| Timeline |
| American Express |
| GraniteShares XOUT Large |
American Express and GraniteShares XOUT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and GraniteShares XOUT
The main advantage of trading using opposite American Express and GraniteShares XOUT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, GraniteShares XOUT 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 GraniteShares XOUT will offset losses from the drop in GraniteShares XOUT's long position.| American Express vs. Highway Holdings Limited | American Express vs. QCR Holdings | American Express vs. Partner Communications | American Express vs. Acumen Pharmaceuticals |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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