Correlation Between IShares Trust and American Express
Can any of the company-specific risk be diversified away by investing in both IShares Trust and American Express 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 IShares Trust and American Express into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Trust and American Express, you can compare the effects of market volatilities on IShares Trust and American Express 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 IShares Trust with a short position of American Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and American Express.
Diversification Opportunities for IShares Trust and American Express
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and American is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and American Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express and IShares Trust 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 iShares Trust are associated (or correlated) with American Express. 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 IShares Trust i.e., IShares Trust and American Express go up and down completely randomly.
Pair Corralation between IShares Trust and American Express
Assuming the 90 days trading horizon IShares Trust is expected to generate 15.4 times less return on investment than American Express. In addition to that, IShares Trust is 1.19 times more volatile than American Express. It trades about 0.01 of its total potential returns per unit of risk. American Express is currently generating about 0.1 per unit of volatility. If you would invest 306,075 in American Express on November 27, 2024 and sell it today you would earn a total of 300,551 from holding American Express or generate 98.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Trust vs. American Express
Performance |
| Timeline |
| iShares Trust |
| American Express |
IShares Trust and American Express Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Trust and American Express
The main advantage of trading using opposite IShares Trust and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Trust position performs unexpectedly, American Express 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 Express will offset losses from the drop in American Express' long position.| IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust |
| American Express vs. Capital One Financial | American Express vs. Burlington Stores | American Express vs. GMxico Transportes SAB | American Express vs. Cognizant Technology Solutions |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |