Correlation Between American Express and GraniteShares 15x

Can any of the company-specific risk be diversified away by investing in both American Express and GraniteShares 15x 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 GraniteShares 15x into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between American Express and GraniteShares 15x Long, you can compare the effects of market volatilities on American Express and GraniteShares 15x 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 GraniteShares 15x. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and GraniteShares 15x.

Diversification Opportunities for American Express and GraniteShares 15x

0.74

Correlation Coefficient

American Express  GraniteShares 15x

Poor diversification

The 3 months correlation between American and GraniteShares is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding American Express and GraniteShares 15x Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares 15x Long 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 GraniteShares 15x. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares 15x Long has no effect on the direction of American Express i.e., American Express and GraniteShares 15x go up and down completely randomly.

Pair Corralation between American Express and GraniteShares 15x

Considering the 90-day investment horizon American Express is expected to generate 2.6 times less return on investment than GraniteShares 15x. But when comparing it to its historical volatility, American Express is 3.03 times less risky than GraniteShares 15x. It trades about 0.18 of its potential returns per unit of risk. GraniteShares 15x Long is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  4,731  in GraniteShares 15x Long on September 1, 2024 and sell it today you would earn a total of  2,458  from holding GraniteShares 15x Long or generate 51.96% return on investment over 90 days.

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

American Express  vs.  GraniteShares 15x Long

American Express

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in American Express are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, American Express reported solid returns over the last few months and may actually be approaching a breakup point.

GraniteShares 15x Long

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GraniteShares 15x Long are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain fundamental indicators, GraniteShares 15x disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with American Express and GraniteShares 15x

The main advantage of trading using opposite American Express and GraniteShares 15x positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, GraniteShares 15x 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 GraniteShares 15x will offset losses from the drop in GraniteShares 15x's long position.

The idea behind American Express and GraniteShares 15x Long 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.