Correlation Between PPLA Participations and American Express
Can any of the company-specific risk be diversified away by investing in both PPLA Participations 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 PPLA Participations and American Express into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PPLA Participations and American Express, you can compare the effects of market volatilities on PPLA Participations 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 PPLA Participations with a short position of American Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPLA Participations and American Express.
Diversification Opportunities for PPLA Participations and American Express
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PPLA and American is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding PPLA Participations and American Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express and PPLA Participations 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 PPLA Participations 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 PPLA Participations i.e., PPLA Participations and American Express go up and down completely randomly.
Pair Corralation between PPLA Participations and American Express
Assuming the 90 days trading horizon PPLA Participations is expected to under-perform the American Express. In addition to that, PPLA Participations is 4.74 times more volatile than American Express. It trades about -0.22 of its total potential returns per unit of risk. American Express is currently generating about 0.23 per unit of volatility. If you would invest 17,988 in American Express on October 20, 2024 and sell it today you would earn a total of 977.00 from holding American Express or generate 5.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PPLA Participations vs. American Express
Performance |
| Timeline |
| PPLA Participations |
| American Express |
PPLA Participations and American Express Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PPLA Participations and American Express
The main advantage of trading using opposite PPLA Participations and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPLA Participations 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.| PPLA Participations vs. Investo Bloomberg Us | PPLA Participations vs. Hashdex Crypto Metaverse | PPLA Participations vs. Trend Etf Msci | PPLA Participations vs. Trend Etf Crsp |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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