Correlation Between American Express and God Bless
Can any of the company-specific risk be diversified away by investing in both American Express and God Bless 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 God Bless into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and God Bless America, you can compare the effects of market volatilities on American Express and God Bless 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 God Bless. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and God Bless.
Diversification Opportunities for American Express and God Bless
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and God is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding American Express and God Bless America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on God Bless America 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 God Bless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of God Bless America has no effect on the direction of American Express i.e., American Express and God Bless go up and down completely randomly.
Pair Corralation between American Express and God Bless
Considering the 90-day investment horizon American Express is expected to generate 1.71 times more return on investment than God Bless. However, American Express is 1.71 times more volatile than God Bless America. It trades about 0.28 of its potential returns per unit of risk. God Bless America is currently generating about 0.35 per unit of risk. If you would invest 27,019 in American Express on September 5, 2024 and sell it today you would earn a total of 3,192 from holding American Express or generate 11.81% 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. God Bless America
Performance |
| Timeline |
| American Express |
| God Bless America |
American Express and God Bless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and God Bless
The main advantage of trading using opposite American Express and God Bless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, God Bless 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 God Bless will offset losses from the drop in God Bless' long position.| American Express vs. 360 Finance | American Express vs. Enova International | American Express vs. Navient Corp | American Express vs. Sentage Holdings |
| God Bless vs. Vanguard Total Stock | God Bless vs. SPDR SP 500 | God Bless vs. iShares Core SP | God Bless vs. Vanguard Dividend Appreciation |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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