Correlation Between American Express and Gamco Global
Can any of the company-specific risk be diversified away by investing in both American Express and Gamco Global 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 Gamco Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Gamco Global Growth, you can compare the effects of market volatilities on American Express and Gamco Global 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 Gamco Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Gamco Global.
Diversification Opportunities for American Express and Gamco Global
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and Gamco is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Gamco Global Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamco Global Growth 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 Gamco Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamco Global Growth has no effect on the direction of American Express i.e., American Express and Gamco Global go up and down completely randomly.
Pair Corralation between American Express and Gamco Global
Considering the 90-day investment horizon American Express is expected to generate 1.4 times more return on investment than Gamco Global. However, American Express is 1.4 times more volatile than Gamco Global Growth. It trades about 0.09 of its potential returns per unit of risk. Gamco Global Growth is currently generating about 0.05 per unit of risk. If you would invest 22,097 in American Express on December 2, 2024 and sell it today you would earn a total of 7,999 from holding American Express or generate 36.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
American Express vs. Gamco Global Growth
Performance |
Timeline |
American Express |
Gamco Global Growth |
American Express and Gamco Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Express and Gamco Global
The main advantage of trading using opposite American Express and Gamco Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Gamco Global 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 Gamco Global will offset losses from the drop in Gamco Global's long position.American Express vs. Visa Class A | American Express vs. PayPal Holdings | American Express vs. Capital One Financial | American Express vs. Upstart Holdings |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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