Correlation Between Nisun International and American Express

Can any of the company-specific risk be diversified away by investing in both Nisun International 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 Nisun International and American Express into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nisun International Enterprise and American Express, you can compare the effects of market volatilities on Nisun International 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 Nisun International with a short position of American Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nisun International and American Express.

Diversification Opportunities for Nisun International and American Express

0.55

Correlation Coefficient

Nisun International  American Express

Very weak diversification

The 3 months correlation between Nisun and American is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Nisun International Enterprise and American Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express and Nisun International 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 Nisun International Enterprise 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 Nisun International i.e., Nisun International and American Express go up and down completely randomly.

Pair Corralation between Nisun International and American Express

Given the investment horizon of 90 days Nisun International Enterprise is expected to generate 2.8 times more return on investment than American Express. However, Nisun International is 2.8 times more volatile than American Express. It trades about 0.03 of its potential returns per unit of risk. American Express is currently generating about 0.06 per unit of risk. If you would invest  610.00  in Nisun International Enterprise on January 29, 2024 and sell it today you would earn a total of  142.00  from holding Nisun International Enterprise or generate 23.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Nisun International Enterprise  vs.  American Express

Nisun International

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nisun International Enterprise are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Nisun International displayed solid returns over the last few months and may actually be approaching a breakup point.

American Express

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in American Express are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, American Express reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nisun International and American Express

The main advantage of trading using opposite Nisun International and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nisun International 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.

The idea behind Nisun International Enterprise and American Express pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.