Correlation Between Promotora and American Express
Can any of the company-specific risk be diversified away by investing in both Promotora 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 Promotora and American Express into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Promotora y Operadora and American Express, you can compare the effects of market volatilities on Promotora 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 Promotora with a short position of American Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Promotora and American Express.
Diversification Opportunities for Promotora and American Express
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Promotora and American is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Promotora y Operadora and American Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express and Promotora 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 Promotora y Operadora 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 Promotora i.e., Promotora and American Express go up and down completely randomly.
Pair Corralation between Promotora and American Express
Assuming the 90 days trading horizon Promotora y Operadora is expected to generate 1.15 times more return on investment than American Express. However, Promotora is 1.15 times more volatile than American Express. It trades about 0.1 of its potential returns per unit of risk. American Express is currently generating about -0.32 per unit of risk. If you would invest 19,558 in Promotora y Operadora on December 6, 2024 and sell it today you would earn a total of 727.00 from holding Promotora y Operadora or generate 3.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Promotora y Operadora vs. American Express
Performance |
| Timeline |
| Promotora y Operadora |
| American Express |
Promotora and American Express Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Promotora and American Express
The main advantage of trading using opposite Promotora and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Promotora 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.| Promotora vs. Gruma SAB de | Promotora vs. Grupo Aeroportuario del | Promotora vs. Grupo Aeroportuario del | Promotora vs. Grupo Aeroportuario del |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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