Correlation Between Metal Sky and American Express
Can any of the company-specific risk be diversified away by investing in both Metal Sky 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 Metal Sky and American Express into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metal Sky Star and American Express, you can compare the effects of market volatilities on Metal Sky 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 Metal Sky with a short position of American Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metal Sky and American Express.
Diversification Opportunities for Metal Sky and American Express
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Metal and American is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Metal Sky Star and American Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express and Metal Sky 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 Metal Sky Star 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 Metal Sky i.e., Metal Sky and American Express go up and down completely randomly.
Pair Corralation between Metal Sky and American Express
Assuming the 90 days horizon Metal Sky Star is expected to generate 14.88 times more return on investment than American Express. However, Metal Sky is 14.88 times more volatile than American Express. It trades about 0.39 of its potential returns per unit of risk. American Express is currently generating about -0.15 per unit of risk. If you would invest 6.05 in Metal Sky Star on March 13, 2024 and sell it today you would earn a total of 2.05 from holding Metal Sky Star or generate 33.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 33.33% |
Values | Daily Returns |
Metal Sky Star vs. American Express
Performance |
Timeline |
Metal Sky Star |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Express |
Metal Sky and American Express Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Metal Sky and American Express
The main advantage of trading using opposite Metal Sky and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metal Sky 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.Metal Sky vs. Zalatoris II Acquisition | Metal Sky vs. 10X Capital Venture | Metal Sky vs. DT Cloud Acquisition |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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