Correlation Between Runway Growth and American Express
Can any of the company-specific risk be diversified away by investing in both Runway Growth 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 Runway Growth and American Express into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Runway Growth Finance and American Express, you can compare the effects of market volatilities on Runway Growth 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 Runway Growth with a short position of American Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Runway Growth and American Express.
Diversification Opportunities for Runway Growth and American Express
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Runway and American is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Runway Growth Finance and American Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express and Runway Growth 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 Runway Growth Finance 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 Runway Growth i.e., Runway Growth and American Express go up and down completely randomly.
Pair Corralation between Runway Growth and American Express
Given the investment horizon of 90 days Runway Growth is expected to generate 108.68 times less return on investment than American Express. In addition to that, Runway Growth is 1.06 times more volatile than American Express. It trades about 0.0 of its total potential returns per unit of risk. American Express is currently generating about 0.18 per unit of volatility. If you would invest 15,118 in American Express on September 1, 2024 and sell it today you would earn a total of 15,350 from holding American Express or generate 101.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Runway Growth Finance vs. American Express
Performance |
| Timeline |
| Runway Growth Finance |
| American Express |
Runway Growth and American Express Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Runway Growth and American Express
The main advantage of trading using opposite Runway Growth and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Runway Growth 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.| Runway Growth vs. Barings BDC | Runway Growth vs. OneMain Holdings | Runway Growth vs. Navient Corp | Runway Growth vs. Federal Agricultural Mortgage |
| American Express vs. 360 Finance | American Express vs. Atlanticus Holdings | American Express vs. Qudian Inc | American Express vs. Enova International |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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