Correlation Between Nordic American and American Express
Can any of the company-specific risk be diversified away by investing in both Nordic American 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 Nordic American and American Express into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nordic American Tankers and American Express, you can compare the effects of market volatilities on Nordic American 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 Nordic American with a short position of American Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic American and American Express.
Diversification Opportunities for Nordic American and American Express
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nordic and American is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Nordic American Tankers and American Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express and Nordic American 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 Nordic American Tankers 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 Nordic American i.e., Nordic American and American Express go up and down completely randomly.
Pair Corralation between Nordic American and American Express
Considering the 90-day investment horizon Nordic American Tankers is expected to under-perform the American Express. But the stock apears to be less risky and, when comparing its historical volatility, Nordic American Tankers is 1.01 times less risky than American Express. The stock trades about -0.05 of its potential returns per unit of risk. The American Express is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 21,390 in American Express on January 24, 2024 and sell it today you would earn a total of 2,506 from holding American Express or generate 11.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Nordic American Tankers vs. American Express
Performance |
Timeline |
Nordic American Tankers |
American Express |
Nordic American and American Express Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nordic American and American Express
The main advantage of trading using opposite Nordic American and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic American 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.Nordic American vs. International Seaways | Nordic American vs. Scorpio Tankers | Nordic American vs. Dorian LPG | Nordic American vs. Euronav NV |
American Express vs. Visa Class A | American Express vs. Mastercard | American Express vs. Oshidori International Holdings | American Express vs. US70082LAB36 |
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 Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Commodity Directory Find actively traded commodities issued by global exchanges | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |