Correlation Between Dreamworks Animation and American Express

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Can any of the company-specific risk be diversified away by investing in both Dreamworks Animation 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 Dreamworks Animation and American Express into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreamworks Animation Skg and American Express, you can compare the effects of market volatilities on Dreamworks Animation 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 Dreamworks Animation with a short position of American Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreamworks Animation and American Express.

Diversification Opportunities for Dreamworks Animation and American Express

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Dreamworks and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Dreamworks Animation Skg and American Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express and Dreamworks Animation 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 Dreamworks Animation Skg 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 Dreamworks Animation i.e., Dreamworks Animation and American Express go up and down completely randomly.

Pair Corralation between Dreamworks Animation and American Express

If you would invest  18,674  in American Express on December 29, 2023 and sell it today you would earn a total of  4,095  from holding American Express or generate 21.93% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy1.61%
ValuesDaily Returns

Dreamworks Animation Skg  vs.  American Express

 Performance 
       Timeline  
Dreamworks Animation Skg 

Risk-Adjusted Performance

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Low
 
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Very Weak
Over the last 90 days Dreamworks Animation Skg has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Dreamworks Animation is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
American Express 

Risk-Adjusted Performance

19 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in American Express are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, American Express reported solid returns over the last few months and may actually be approaching a breakup point.

Dreamworks Animation and American Express Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Dreamworks Animation and American Express

The main advantage of trading using opposite Dreamworks Animation and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreamworks Animation 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 Dreamworks Animation Skg 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.
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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