Correlation Between Spring Valley and American Express
Can any of the company-specific risk be diversified away by investing in both Spring Valley 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 Spring Valley and American Express into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spring Valley Acquisition and American Express, you can compare the effects of market volatilities on Spring Valley 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 Spring Valley with a short position of American Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spring Valley and American Express.
Diversification Opportunities for Spring Valley and American Express
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Spring and American is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Spring Valley Acquisition and American Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express and Spring Valley 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 Spring Valley Acquisition 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 Spring Valley i.e., Spring Valley and American Express go up and down completely randomly.
Pair Corralation between Spring Valley and American Express
Given the investment horizon of 90 days Spring Valley Acquisition is expected to under-perform the American Express. But the stock apears to be less risky and, when comparing its historical volatility, Spring Valley Acquisition is 2.43 times less risky than American Express. The stock trades about -0.08 of its potential returns per unit of risk. The American Express is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 27,147 in American Express on August 27, 2024 and sell it today you would earn a total of 2,983 from holding American Express or generate 10.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spring Valley Acquisition vs. American Express
Performance |
| Timeline |
| Spring Valley Acquisition |
| American Express |
Spring Valley and American Express Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spring Valley and American Express
The main advantage of trading using opposite Spring Valley and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spring Valley 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.The idea behind Spring Valley Acquisition and American Express pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| American Express vs. SLM Corp | American Express vs. Orix Corp Ads | American Express vs. FirstCash | American Express vs. Medallion Financial Corp |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |