Correlation Between American Express and Mojo Data

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

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

Diversification Opportunities for American Express and Mojo Data

-0.38

Correlation Coefficient

American Express  Mojo Data

Very good diversification

The 3 months correlation between American and Mojo is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Mojo Data Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mojo Data Solutions 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 Mojo Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mojo Data Solutions has no effect on the direction of American Express i.e., American Express and Mojo Data go up and down completely randomly.

Pair Corralation between American Express and Mojo Data

Considering the 90-day investment horizon American Express is expected to generate 748.72 times less return on investment than Mojo Data. But when comparing it to its historical volatility, American Express is 97.54 times less risky than Mojo Data. It trades about 0.02 of its potential returns per unit of risk. Mojo Data Solutions is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  0.61  in Mojo Data Solutions on October 11, 2024 and sell it today you would lose (0.54) from holding Mojo Data Solutions or give up 88.52% of portfolio value over 90 days.

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

American Express  vs.  Mojo Data Solutions

American Express

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in American Express are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, American Express may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Mojo Data Solutions

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mojo Data Solutions are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating fundamental indicators, Mojo Data unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with American Express and Mojo Data

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

The idea behind American Express and Mojo Data Solutions 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.