Correlation Between American Express and Green Oasis

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

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

Diversification Opportunities for American Express and Green Oasis

0.0

Correlation Coefficient

American Express  Green Oasis

Pay attention - limited upside

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

Pair Corralation between American Express and Green Oasis

If you would invest  15,496  in American Express on December 2, 2024 and sell it today you would earn a total of  14,600  from holding American Express or generate 94.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

American Express  vs.  Green Oasis Environmental

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 latest stock price agitation, may contribute to short-term losses for the retail investors.

Green Oasis Environmental

Risk-Adjusted Performance

Very Weak

Over the last 90 days Green Oasis Environmental has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Green Oasis is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with American Express and Green Oasis

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

The idea behind American Express and Green Oasis Environmental 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.