Correlation Between Transportadora and American Express
Can any of the company-specific risk be diversified away by investing in both Transportadora 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 Transportadora and American Express into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transportadora de Gas and American Express Co, you can compare the effects of market volatilities on Transportadora 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 Transportadora with a short position of American Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transportadora and American Express.
Diversification Opportunities for Transportadora and American Express
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Transportadora and American is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Transportadora de Gas and American Express Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express and Transportadora 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 Transportadora de Gas 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 Transportadora i.e., Transportadora and American Express go up and down completely randomly.
Pair Corralation between Transportadora and American Express
Assuming the 90 days trading horizon Transportadora de Gas is expected to under-perform the American Express. In addition to that, Transportadora is 2.17 times more volatile than American Express Co. It trades about -0.1 of its total potential returns per unit of risk. American Express Co is currently generating about 0.29 per unit of volatility. If you would invest 2,257,500 in American Express Co on October 20, 2024 and sell it today you would earn a total of 215,000 from holding American Express Co or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Transportadora de Gas vs. American Express Co
Performance |
| Timeline |
| Transportadora de Gas |
| American Express |
Transportadora and American Express Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transportadora and American Express
The main advantage of trading using opposite Transportadora and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transportadora 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.| Transportadora vs. Naturgy BAN SA | Transportadora vs. Distribuidora de Gas | Transportadora vs. Walmart | Transportadora vs. Central Puerto SA |
| American Express vs. United States Steel | American Express vs. Agrometal SAI | American Express vs. Telecom Argentina | American Express vs. Compania de Transporte |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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