Correlation Between NYSE Composite and AMERICAN
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By analyzing existing cross correlation between NYSE Composite and AMERICAN EXPRESS 42, you can compare the effects of market volatilities on NYSE Composite and AMERICAN 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 NYSE Composite with a short position of AMERICAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and AMERICAN.
Diversification Opportunities for NYSE Composite and AMERICAN
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and AMERICAN is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and AMERICAN EXPRESS 42 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMERICAN EXPRESS and NYSE Composite 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 NYSE Composite are associated (or correlated) with AMERICAN. 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 NYSE Composite i.e., NYSE Composite and AMERICAN go up and down completely randomly.
Pair Corralation between NYSE Composite and AMERICAN
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.59 times more return on investment than AMERICAN. However, NYSE Composite is 2.59 times more volatile than AMERICAN EXPRESS 42. It trades about 0.09 of its potential returns per unit of risk. AMERICAN EXPRESS 42 is currently generating about 0.01 per unit of risk. If you would invest 1,626,371 in NYSE Composite on September 12, 2024 and sell it today you would earn a total of 361,819 from holding NYSE Composite or generate 22.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.86% |
| Values | Daily Returns |
NYSE Composite vs. AMERICAN EXPRESS 42
Performance |
| Timeline |
NYSE Composite and AMERICAN Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
AMERICAN EXPRESS 42
Pair trading matchups for AMERICAN
Pair Trading with NYSE Composite and AMERICAN
The main advantage of trading using opposite NYSE Composite and AMERICAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, AMERICAN 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 will offset losses from the drop in AMERICAN's long position.| NYSE Composite vs. Teleflex Incorporated | NYSE Composite vs. Victorias Secret Co | NYSE Composite vs. Under Armour C | NYSE Composite vs. Steven Madden |
| AMERICAN vs. Cardinal Health | AMERICAN vs. Simon Property Group | AMERICAN vs. Beauty Health Co | AMERICAN vs. Fast Retailing Co |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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