Correlation Between Mastercard and American Express
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By analyzing existing cross correlation between Mastercard and American Express, you can compare the effects of market volatilities on Mastercard 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 Mastercard with a short position of American Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mastercard and American Express.
Diversification Opportunities for Mastercard and American Express
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mastercard and American is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Mastercard and American Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express and Mastercard 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 Mastercard 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 Mastercard i.e., Mastercard and American Express go up and down completely randomly.
Pair Corralation between Mastercard and American Express
Assuming the 90 days horizon Mastercard is expected to generate 1.77 times less return on investment than American Express. But when comparing it to its historical volatility, Mastercard is 1.23 times less risky than American Express. It trades about 0.22 of its potential returns per unit of risk. American Express is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 25,240 in American Express on August 31, 2024 and sell it today you would earn a total of 3,775 from holding American Express or generate 14.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Mastercard vs. American Express
Performance |
| Timeline |
| Mastercard |
| American Express |
Mastercard and American Express Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mastercard and American Express
The main advantage of trading using opposite Mastercard and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mastercard 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.| Mastercard vs. LG Electronics | Mastercard vs. TITAN MACHINERY | Mastercard vs. Arrow Electronics | Mastercard vs. HYDROFARM HLD GRP |
| American Express vs. Mastercard | American Express vs. Capital One Financial | American Express vs. ORIX Corporation |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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