Correlation Between American Express and Autopistas Del

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

By analyzing existing cross correlation between American Express Co and Autopistas del Sol, you can compare the effects of market volatilities on American Express and Autopistas Del 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 Autopistas Del. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Autopistas Del.

Diversification Opportunities for American Express and Autopistas Del

0.0

Correlation Coefficient

American Express  Autopistas Del

Pay attention - limited upside

The 3 months correlation between American and Autopistas is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Express Co and Autopistas del Sol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autopistas del Sol 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 Co are associated (or correlated) with Autopistas Del. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autopistas del Sol has no effect on the direction of American Express i.e., American Express and Autopistas Del go up and down completely randomly.

Pair Corralation between American Express and Autopistas Del

If you would invest  284,000  in Autopistas del Sol on October 25, 2024 and sell it today you would earn a total of  71,000  from holding Autopistas del Sol or generate 25.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.67%
Values	Daily Returns

American Express Co  vs.  Autopistas del Sol

American Express

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days American Express Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, American Express is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Autopistas del Sol

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Autopistas del Sol are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Autopistas Del sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with American Express and Autopistas Del

The main advantage of trading using opposite American Express and Autopistas Del positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Autopistas Del 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 Autopistas Del will offset losses from the drop in Autopistas Del's long position.

The idea behind American Express Co and Autopistas del Sol 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.

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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.