Correlation Between European Metals and American Express
Can any of the company-specific risk be diversified away by investing in both European Metals 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 European Metals and American Express into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between European Metals Holdings and American Express Co, you can compare the effects of market volatilities on European Metals 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 European Metals with a short position of American Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Metals and American Express.
Diversification Opportunities for European Metals and American Express
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between European and American is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding European Metals Holdings and American Express Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express and European Metals 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 European Metals Holdings 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 European Metals i.e., European Metals and American Express go up and down completely randomly.
Pair Corralation between European Metals and American Express
Assuming the 90 days trading horizon European Metals Holdings is expected to under-perform the American Express. In addition to that, European Metals is 2.36 times more volatile than American Express Co. It trades about -0.06 of its total potential returns per unit of risk. American Express Co is currently generating about 0.1 per unit of volatility. If you would invest 14,516 in American Express Co on October 11, 2024 and sell it today you would earn a total of 15,484 from holding American Express Co or generate 106.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.59% |
| Values | Daily Returns |
European Metals Holdings vs. American Express Co
Performance |
| Timeline |
| European Metals Holdings |
| American Express |
European Metals and American Express Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with European Metals and American Express
The main advantage of trading using opposite European Metals and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Metals 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.| European Metals vs. Tyson Foods Cl | European Metals vs. Datagroup SE | European Metals vs. First Class Metals | European Metals vs. Dairy Farm International |
| American Express vs. Omega Healthcare Investors | American Express vs. Bellevue Healthcare Trust | American Express vs. Abingdon Health Plc | American Express vs. Naturhouse Health SA |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |