Correlation Between Tres Tentos and American Express
Can any of the company-specific risk be diversified away by investing in both Tres Tentos 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 Tres Tentos and American Express into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tres Tentos Agroindustrial and American Express, you can compare the effects of market volatilities on Tres Tentos 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 Tres Tentos with a short position of American Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tres Tentos and American Express.
Diversification Opportunities for Tres Tentos and American Express
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tres and American is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Tres Tentos Agroindustrial and American Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express and Tres Tentos 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 Tres Tentos Agroindustrial 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 Tres Tentos i.e., Tres Tentos and American Express go up and down completely randomly.
Pair Corralation between Tres Tentos and American Express
Assuming the 90 days trading horizon Tres Tentos Agroindustrial is expected to under-perform the American Express. In addition to that, Tres Tentos is 2.04 times more volatile than American Express. It trades about -0.02 of its total potential returns per unit of risk. American Express is currently generating about 0.06 per unit of volatility. If you would invest 18,273 in American Express on October 1, 2024 and sell it today you would earn a total of 253.00 from holding American Express or generate 1.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tres Tentos Agroindustrial vs. American Express
Performance |
| Timeline |
| Tres Tentos Agroindu |
| American Express |
Tres Tentos and American Express Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tres Tentos and American Express
The main advantage of trading using opposite Tres Tentos and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tres Tentos 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.| Tres Tentos vs. The Mosaic | Tres Tentos vs. Boa Safra Sementes | Tres Tentos vs. Fertilizantes Heringer SA |
| American Express vs. Agilent Technologies | American Express vs. Dell Technologies | American Express vs. Metalrgica Riosulense SA | American Express vs. Cognizant Technology Solutions |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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