Correlation Between American Express and AlphaVest Acquisition

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

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

Diversification Opportunities for American Express and AlphaVest Acquisition

0.32

Correlation Coefficient

American Express  AlphaVest Acquisition

Weak diversification

The 3 months correlation between American and AlphaVest is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding American Express and AlphaVest Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AlphaVest Acquisition 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 AlphaVest Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AlphaVest Acquisition has no effect on the direction of American Express i.e., American Express and AlphaVest Acquisition go up and down completely randomly.

Pair Corralation between American Express and AlphaVest Acquisition

Considering the 90-day investment horizon American Express is expected to under-perform the AlphaVest Acquisition. In addition to that, American Express is 2.64 times more volatile than AlphaVest Acquisition Corp. It trades about -0.08 of its total potential returns per unit of risk. AlphaVest Acquisition Corp is currently generating about 0.0 per unit of volatility. If you would invest  1,131  in AlphaVest Acquisition Corp on December 29, 2024 and sell it today you would earn a total of  0.00  from holding AlphaVest Acquisition Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

American Express  vs.  AlphaVest Acquisition Corp

American Express

Risk-Adjusted Performance

Very Weak

Over the last 90 days American Express has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest abnormal performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

AlphaVest Acquisition

Risk-Adjusted Performance

Very Weak

Over the last 90 days AlphaVest Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, AlphaVest Acquisition is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with American Express and AlphaVest Acquisition

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

The idea behind American Express and AlphaVest Acquisition Corp 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.