Correlation Between American Express and New Opportunities
Can any of the company-specific risk be diversified away by investing in both American Express and New Opportunities 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 New Opportunities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and New Opportunities Fund, you can compare the effects of market volatilities on American Express and New Opportunities 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 New Opportunities. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and New Opportunities.
Diversification Opportunities for American Express and New Opportunities
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and New is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Express and New Opportunities Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Opportunities 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 New Opportunities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Opportunities has no effect on the direction of American Express i.e., American Express and New Opportunities go up and down completely randomly.
Pair Corralation between American Express and New Opportunities
If you would invest 20,081 in American Express on January 26, 2024 and sell it today you would earn a total of 3,831 from holding American Express or generate 19.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
American Express vs. New Opportunities Fund
Performance |
| Timeline |
| American Express |
| New Opportunities |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Express and New Opportunities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and New Opportunities
The main advantage of trading using opposite American Express and New Opportunities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, New Opportunities 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 New Opportunities will offset losses from the drop in New Opportunities' long position.| American Express vs. Orix Corp Ads | American Express vs. FirstCash | American Express vs. Enova International |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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