Correlation Between Rigolleau and American Express
Can any of the company-specific risk be diversified away by investing in both Rigolleau 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 Rigolleau and American Express into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rigolleau SA and American Express Co, you can compare the effects of market volatilities on Rigolleau 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 Rigolleau with a short position of American Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rigolleau and American Express.
Diversification Opportunities for Rigolleau and American Express
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Rigolleau and American is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Rigolleau SA and American Express Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express and Rigolleau 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 Rigolleau SA 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 Rigolleau i.e., Rigolleau and American Express go up and down completely randomly.
Pair Corralation between Rigolleau and American Express
Assuming the 90 days trading horizon Rigolleau is expected to generate 1.63 times less return on investment than American Express. But when comparing it to its historical volatility, Rigolleau SA is 1.01 times less risky than American Express. It trades about 0.11 of its potential returns per unit of risk. American Express Co is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 336,897 in American Express Co on September 20, 2024 and sell it today you would earn a total of 1,943,103 from holding American Express Co or generate 576.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rigolleau SA vs. American Express Co
Performance |
| Timeline |
| Rigolleau SA |
| American Express |
Rigolleau and American Express Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rigolleau and American Express
The main advantage of trading using opposite Rigolleau and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rigolleau 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.| Rigolleau vs. American Express Co | Rigolleau vs. QUALCOMM Incorporated | Rigolleau vs. United States Steel | Rigolleau vs. Pfizer Inc |
| American Express vs. QUALCOMM Incorporated | American Express vs. United States Steel | American Express vs. Pfizer Inc | American Express vs. Distribuidora de Gas |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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