Correlation Between Triad Group and American Express
Can any of the company-specific risk be diversified away by investing in both Triad Group 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 Triad Group and American Express into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Triad Group PLC and American Express Co, you can compare the effects of market volatilities on Triad Group 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 Triad Group with a short position of American Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triad Group and American Express.
Diversification Opportunities for Triad Group and American Express
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Triad and American is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Triad Group PLC and American Express Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express and Triad Group 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 Triad Group PLC 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 Triad Group i.e., Triad Group and American Express go up and down completely randomly.
Pair Corralation between Triad Group and American Express
Assuming the 90 days trading horizon Triad Group is expected to generate 2.01 times less return on investment than American Express. In addition to that, Triad Group is 1.72 times more volatile than American Express Co. It trades about 0.03 of its total potential returns per unit of risk. American Express Co is currently generating about 0.1 per unit of volatility. If you would invest 23,672 in American Express Co on September 24, 2024 and sell it today you would earn a total of 6,296 from holding American Express Co or generate 26.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.81% |
| Values | Daily Returns |
Triad Group PLC vs. American Express Co
Performance |
| Timeline |
| Triad Group PLC |
| American Express |
Triad Group and American Express Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Triad Group and American Express
The main advantage of trading using opposite Triad Group and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triad Group 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.| Triad Group vs. Rockfire Resources plc | Triad Group vs. Tlou Energy | Triad Group vs. Ikigai Ventures | Triad Group vs. Falcon Oil Gas |
| American Express vs. Uniper SE | American Express vs. Mulberry Group PLC | American Express vs. London Security Plc | American Express vs. Triad Group PLC |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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