Correlation Between American Express and Dollar Tree
Can any of the company-specific risk be diversified away by investing in both American Express and Dollar Tree 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 American Express and Dollar Tree into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Dollar Tree, you can compare the effects of market volatilities on American Express and Dollar Tree 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 American Express with a short position of Dollar Tree. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Dollar Tree.
Diversification Opportunities for American Express and Dollar Tree
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and Dollar is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Dollar Tree in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dollar Tree and American Express 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 American Express are associated (or correlated) with Dollar Tree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dollar Tree has no effect on the direction of American Express i.e., American Express and Dollar Tree go up and down completely randomly.
Pair Corralation between American Express and Dollar Tree
Considering the 90-day investment horizon American Express is expected to generate 1.04 times more return on investment than Dollar Tree. However, American Express is 1.04 times more volatile than Dollar Tree. It trades about 0.16 of its potential returns per unit of risk. Dollar Tree is currently generating about -0.07 per unit of risk. If you would invest 22,533 in American Express on January 25, 2024 and sell it today you would earn a total of 1,379 from holding American Express or generate 6.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. Dollar Tree
Performance |
| Timeline |
| American Express |
| Dollar Tree |
American Express and Dollar Tree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Dollar Tree
The main advantage of trading using opposite American Express and Dollar Tree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Dollar Tree 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 Dollar Tree will offset losses from the drop in Dollar Tree's long position.| American Express vs. Visa Class A | American Express vs. PayPal Holdings | American Express vs. Capital One Financial | American Express vs. Upstart HoldingsInc |
| Dollar Tree vs. BJs Wholesale Club | Dollar Tree vs. Big Lots | Dollar Tree vs. Walmart | Dollar Tree vs. Target |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |