Correlation Between American Express and Eneti

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

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

Diversification Opportunities for American Express and Eneti

0.0

Correlation Coefficient

American Express  Eneti

Pay attention - limited upside

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

Pair Corralation between American Express and Eneti

If you would invest (100.00) in Eneti Inc on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Eneti Inc or generate -100.0% return on investment over 90 days.

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

American Express  vs.  Eneti Inc

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 latest abnormal performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Eneti Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eneti Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Eneti is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with American Express and Eneti

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

The idea behind American Express and Eneti Inc 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.