Correlation Between American Express and Canadian Western
Can any of the company-specific risk be diversified away by investing in both American Express and Canadian Western 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 Canadian Western into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Canadian Western Bank, you can compare the effects of market volatilities on American Express and Canadian Western 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 Canadian Western. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Canadian Western.
Diversification Opportunities for American Express and Canadian Western
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Canadian is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Canadian Western Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Western Bank 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 Canadian Western. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Western Bank has no effect on the direction of American Express i.e., American Express and Canadian Western go up and down completely randomly.
Pair Corralation between American Express and Canadian Western
If you would invest 21,190 in American Express on February 16, 2024 and sell it today you would earn a total of 2,942 from holding American Express or generate 13.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 1.59% |
Values | Daily Returns |
American Express vs. Canadian Western Bank
Performance |
Timeline |
American Express |
Canadian Western Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Express and Canadian Western Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Express and Canadian Western
The main advantage of trading using opposite American Express and Canadian Western positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Canadian Western 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 Canadian Western will offset losses from the drop in Canadian Western'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 |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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