Correlation Between American Express and Inception Growth

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

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

Diversification Opportunities for American Express and Inception Growth

0.0

Correlation Coefficient

American Express  Inception Growth

Pay attention - limited upside

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

Pair Corralation between American Express and Inception Growth

If you would invest  24,285  in American Express on December 5, 2024 and sell it today you would earn a total of  5,264  from holding American Express or generate 21.68% return on investment over 90 days.

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

American Express  vs.  Inception Growth Acquisition

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.

Inception Growth Acq

Risk-Adjusted Performance

Very Weak

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

Pair Trading with American Express and Inception Growth

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

The idea behind American Express and Inception Growth Acquisition 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.