Correlation Between Nordon Indstrias and American Express
Can any of the company-specific risk be diversified away by investing in both Nordon Indstrias 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 Nordon Indstrias and American Express into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nordon Indstrias Metalrgicas and American Express, you can compare the effects of market volatilities on Nordon Indstrias 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 Nordon Indstrias with a short position of American Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordon Indstrias and American Express.
Diversification Opportunities for Nordon Indstrias and American Express
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nordon and American is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Nordon Indstrias Metalrgicas and American Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express and Nordon Indstrias 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 Nordon Indstrias Metalrgicas 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 Nordon Indstrias i.e., Nordon Indstrias and American Express go up and down completely randomly.
Pair Corralation between Nordon Indstrias and American Express
Assuming the 90 days trading horizon Nordon Indstrias Metalrgicas is expected to generate 5.59 times more return on investment than American Express. However, Nordon Indstrias is 5.59 times more volatile than American Express. It trades about 0.04 of its potential returns per unit of risk. American Express is currently generating about 0.11 per unit of risk. If you would invest 650.00 in Nordon Indstrias Metalrgicas on October 31, 2024 and sell it today you would lose (45.00) from holding Nordon Indstrias Metalrgicas or give up 6.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.23% |
| Values | Daily Returns |
Nordon Indstrias Metalrgicas vs. American Express
Performance |
| Timeline |
| Nordon Indstrias Met |
| American Express |
Nordon Indstrias and American Express Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordon Indstrias and American Express
The main advantage of trading using opposite Nordon Indstrias and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordon Indstrias 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.| Nordon Indstrias vs. METISA Metalrgica Timboense | Nordon Indstrias vs. Lupatech SA | Nordon Indstrias vs. Refinaria de Petrleos | Nordon Indstrias vs. Electro Ao Altona |
| American Express vs. Ryanair Holdings plc | American Express vs. Iron Mountain Incorporated | American Express vs. Guidewire Software, | American Express vs. Pure Storage, |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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