Correlation Between BGC Partners and American Express
Can any of the company-specific risk be diversified away by investing in both BGC Partners 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 BGC Partners and American Express into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BGC Partners and American Express, you can compare the effects of market volatilities on BGC Partners 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 BGC Partners with a short position of American Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of BGC Partners and American Express.
Diversification Opportunities for BGC Partners and American Express
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BGC and American is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding BGC Partners and American Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express and BGC Partners 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 BGC Partners 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 BGC Partners i.e., BGC Partners and American Express go up and down completely randomly.
Pair Corralation between BGC Partners and American Express
If you would invest 22,533 in American Express on January 24, 2024 and sell it today you would earn a total of 1,363 from holding American Express or generate 6.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 4.76% |
Values | Daily Returns |
BGC Partners vs. American Express
Performance |
Timeline |
BGC Partners |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Express |
BGC Partners and American Express Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BGC Partners and American Express
The main advantage of trading using opposite BGC Partners and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BGC Partners 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.BGC Partners vs. Newmark Group | BGC Partners vs. Consolidated Communications | BGC Partners vs. Brookline Bancorp | BGC Partners vs. SLR Investment Corp |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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