Correlation Between Intel and American Express
Can any of the company-specific risk be diversified away by investing in both Intel 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 Intel and American Express into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and American Express, you can compare the effects of market volatilities on Intel 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 Intel with a short position of American Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and American Express.
Diversification Opportunities for Intel and American Express
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Intel and American is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Intel and American Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express and Intel 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 Intel 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 Intel i.e., Intel and American Express go up and down completely randomly.
Pair Corralation between Intel and American Express
Given the investment horizon of 90 days Intel is expected to generate 4.63 times more return on investment than American Express. However, Intel is 4.63 times more volatile than American Express. It trades about 0.2 of its potential returns per unit of risk. American Express is currently generating about -0.31 per unit of risk. If you would invest 2,029 in Intel on November 27, 2024 and sell it today you would earn a total of 398.00 from holding Intel or generate 19.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. American Express
Performance |
| Timeline |
| Intel |
| American Express |
Intel and American Express Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and American Express
The main advantage of trading using opposite Intel and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel 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.| Intel vs. NVIDIA | Intel vs. Taiwan Semiconductor Manufacturing | Intel vs. Marvell Technology Group | Intel vs. Micron Technology |
| American Express vs. Visa Class A | American Express vs. PayPal Holdings | American Express vs. Capital One Financial | American Express vs. Upstart Holdings |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |