Correlation Between HEALTHCARE REAL and American Express
Can any of the company-specific risk be diversified away by investing in both HEALTHCARE REAL 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 HEALTHCARE REAL and American Express into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HEALTHCARE REAL A and American Express, you can compare the effects of market volatilities on HEALTHCARE REAL 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 HEALTHCARE REAL with a short position of American Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEALTHCARE REAL and American Express.
Diversification Opportunities for HEALTHCARE REAL and American Express
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HEALTHCARE and American is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding HEALTHCARE REAL A and American Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express and HEALTHCARE REAL 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 HEALTHCARE REAL A 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 HEALTHCARE REAL i.e., HEALTHCARE REAL and American Express go up and down completely randomly.
Pair Corralation between HEALTHCARE REAL and American Express
Assuming the 90 days horizon HEALTHCARE REAL is expected to generate 10.8 times less return on investment than American Express. In addition to that, HEALTHCARE REAL is 1.0 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 14,084 in American Express on October 7, 2024 and sell it today you would earn a total of 15,226 from holding American Express or generate 108.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HEALTHCARE REAL A vs. American Express
Performance |
| Timeline |
| HEALTHCARE REAL A |
| American Express |
HEALTHCARE REAL and American Express Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HEALTHCARE REAL and American Express
The main advantage of trading using opposite HEALTHCARE REAL and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEALTHCARE REAL 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.| HEALTHCARE REAL vs. QINGCI GAMES INC | HEALTHCARE REAL vs. USWE SPORTS AB | HEALTHCARE REAL vs. Scientific Games | HEALTHCARE REAL vs. PLAYWAY SA ZY 10 |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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