Correlation Between Encore Capital and AMERICAN
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By analyzing existing cross correlation between Encore Capital Group and AMERICAN EXPRESS CR, you can compare the effects of market volatilities on Encore Capital and AMERICAN 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 Encore Capital with a short position of AMERICAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Encore Capital and AMERICAN.
Diversification Opportunities for Encore Capital and AMERICAN
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Encore and AMERICAN is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Encore Capital Group and AMERICAN EXPRESS CR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMERICAN EXPRESS and Encore Capital 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 Encore Capital Group are associated (or correlated) with AMERICAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMERICAN EXPRESS has no effect on the direction of Encore Capital i.e., Encore Capital and AMERICAN go up and down completely randomly.
Pair Corralation between Encore Capital and AMERICAN
If you would invest 4,741 in Encore Capital Group on October 20, 2024 and sell it today you would earn a total of 144.00 from holding Encore Capital Group or generate 3.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
Encore Capital Group vs. AMERICAN EXPRESS CR
Performance |
| Timeline |
| Encore Capital Group |
| AMERICAN EXPRESS |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Encore Capital and AMERICAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Encore Capital and AMERICAN
The main advantage of trading using opposite Encore Capital and AMERICAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Encore Capital position performs unexpectedly, AMERICAN 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 AMERICAN will offset losses from the drop in AMERICAN's long position.| Encore Capital vs. Upstart Holdings | Encore Capital vs. Affirm Holdings | Encore Capital vs. Lucid Group | Encore Capital vs. Palantir Technologies Class |
| AMERICAN vs. Univest Pennsylvania | AMERICAN vs. Summit Bank Group | AMERICAN vs. U Power Limited | AMERICAN vs. SEI Investments |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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