Correlation Between Ledesma SAAI and American Express
Can any of the company-specific risk be diversified away by investing in both Ledesma SAAI 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 Ledesma SAAI and American Express into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ledesma SAAI and American Express Co, you can compare the effects of market volatilities on Ledesma SAAI 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 Ledesma SAAI with a short position of American Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ledesma SAAI and American Express.
Diversification Opportunities for Ledesma SAAI and American Express
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ledesma and American is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Ledesma SAAI and American Express Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express and Ledesma SAAI 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 Ledesma SAAI 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 Ledesma SAAI i.e., Ledesma SAAI and American Express go up and down completely randomly.
Pair Corralation between Ledesma SAAI and American Express
Assuming the 90 days trading horizon Ledesma SAAI is expected to under-perform the American Express. In addition to that, Ledesma SAAI is 1.09 times more volatile than American Express Co. It trades about -0.08 of its total potential returns per unit of risk. American Express Co is currently generating about 0.29 per unit of volatility. If you would invest 2,257,500 in American Express Co on October 20, 2024 and sell it today you would earn a total of 215,000 from holding American Express Co or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ledesma SAAI vs. American Express Co
Performance |
| Timeline |
| Ledesma SAAI |
| American Express |
Ledesma SAAI and American Express Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ledesma SAAI and American Express
The main advantage of trading using opposite Ledesma SAAI and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ledesma SAAI 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.| Ledesma SAAI vs. Molinos Agro SA | Ledesma SAAI vs. Cresud SA | Ledesma SAAI vs. San Miguel AG | Ledesma SAAI vs. Inversora Juramento SA |
| American Express vs. United States Steel | American Express vs. Agrometal SAI | American Express vs. Telecom Argentina | American Express vs. Compania de Transporte |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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