Correlation Between American Express and Nouveau Life
Can any of the company-specific risk be diversified away by investing in both American Express and Nouveau Life 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 Nouveau Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Nouveau Life Pharmaceuticals, you can compare the effects of market volatilities on American Express and Nouveau Life 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 Nouveau Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Nouveau Life.
Diversification Opportunities for American Express and Nouveau Life
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between American and Nouveau is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Nouveau Life Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nouveau Life Pharmac 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 Nouveau Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nouveau Life Pharmac has no effect on the direction of American Express i.e., American Express and Nouveau Life go up and down completely randomly.
Pair Corralation between American Express and Nouveau Life
Considering the 90-day investment horizon American Express is expected to under-perform the Nouveau Life. But the stock apears to be less risky and, when comparing its historical volatility, American Express is 21.11 times less risky than Nouveau Life. The stock trades about -0.08 of its potential returns per unit of risk. The Nouveau Life Pharmaceuticals is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 0.02 in Nouveau Life Pharmaceuticals on December 29, 2024 and sell it today you would lose (0.01) from holding Nouveau Life Pharmaceuticals or give up 50.0% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 98.39% |
Values | Daily Returns |
American Express vs. Nouveau Life Pharmaceuticals
Performance |
Timeline |
American Express |
Nouveau Life Pharmac |
American Express and Nouveau Life Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Express and Nouveau Life
The main advantage of trading using opposite American Express and Nouveau Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Nouveau Life 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 Nouveau Life will offset losses from the drop in Nouveau Life's long position.American Express vs. Visa Class A | American Express vs. PayPal Holdings | American Express vs. Capital One Financial | American Express vs. Mastercard |
Nouveau Life vs. Medical Cannabis Pay | Nouveau Life vs. PPJ Healthcare Enterprises | Nouveau Life vs. Definitive Healthcare Corp | Nouveau Life vs. Premier |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
Global Correlations Find global opportunities by holding instruments from different markets | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |