Correlation Between American Express and Camtek

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

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

Diversification Opportunities for American Express and Camtek

0.68

Correlation Coefficient

American Express  Camtek

Poor diversification

The 3 months correlation between American and Camtek is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Camtek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camtek 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 Camtek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camtek has no effect on the direction of American Express i.e., American Express and Camtek go up and down completely randomly.

Pair Corralation between American Express and Camtek

Considering the 90-day investment horizon American Express is expected to under-perform the Camtek. But the stock apears to be less risky and, when comparing its historical volatility, American Express is 2.72 times less risky than Camtek. The stock trades about -0.04 of its potential returns per unit of risk. The Camtek is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  7,450  in Camtek on November 28, 2024 and sell it today you would earn a total of  238.00  from holding Camtek or generate 3.19% return on investment over 90 days.

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

American Express  vs.  Camtek

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 relatively invariable basic indicators, American Express is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Camtek

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Camtek are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating primary indicators, Camtek may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with American Express and Camtek

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

The idea behind American Express and Camtek 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.