Correlation Between TRANSCANADA and American Express
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By analyzing existing cross correlation between TRANSCANADA PIPELINES LTD and American Express, you can compare the effects of market volatilities on TRANSCANADA 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 TRANSCANADA with a short position of American Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRANSCANADA and American Express.
Diversification Opportunities for TRANSCANADA and American Express
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TRANSCANADA and American is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding TRANSCANADA PIPELINES LTD and American Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express and TRANSCANADA 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 TRANSCANADA PIPELINES LTD 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 TRANSCANADA i.e., TRANSCANADA and American Express go up and down completely randomly.
Pair Corralation between TRANSCANADA and American Express
Assuming the 90 days trading horizon TRANSCANADA is expected to generate 9.32 times less return on investment than American Express. But when comparing it to its historical volatility, TRANSCANADA PIPELINES LTD is 1.43 times less risky than American Express. It trades about 0.02 of its potential returns per unit of risk. American Express is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 17,030 in American Express on September 2, 2024 and sell it today you would earn a total of 13,438 from holding American Express or generate 78.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
TRANSCANADA PIPELINES LTD vs. American Express
Performance |
| Timeline |
| TRANSCANADA PIPELINES LTD |
| American Express |
TRANSCANADA and American Express Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRANSCANADA and American Express
The main advantage of trading using opposite TRANSCANADA and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRANSCANADA 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.| TRANSCANADA vs. AEP TEX INC | TRANSCANADA vs. US BANK NATIONAL | TRANSCANADA vs. Bank of America | TRANSCANADA vs. GE Aerospace |
| 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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