Correlation Between American Express and Bausch
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By analyzing existing cross correlation between American Express and Bausch Health Companies, you can compare the effects of market volatilities on American Express and Bausch 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 Bausch. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Bausch.
Diversification Opportunities for American Express and Bausch
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Bausch is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Bausch Health Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bausch Health Companies 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 Bausch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bausch Health Companies has no effect on the direction of American Express i.e., American Express and Bausch go up and down completely randomly.
Pair Corralation between American Express and Bausch
Considering the 90-day investment horizon American Express is expected to generate 0.69 times more return on investment than Bausch. However, American Express is 1.44 times less risky than Bausch. It trades about 0.16 of its potential returns per unit of risk. Bausch Health Companies is currently generating about 0.04 per unit of risk. If you would invest 26,041 in American Express on September 14, 2024 and sell it today you would earn a total of 4,177 from holding American Express or generate 16.04% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 39.06% |
Values | Daily Returns |
American Express vs. Bausch Health Companies
Performance |
Timeline |
American Express |
Bausch Health Companies |
American Express and Bausch Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Express and Bausch
The main advantage of trading using opposite American Express and Bausch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Bausch 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 Bausch will offset losses from the drop in Bausch's long position.American Express vs. Visa Class A | American Express vs. PayPal Holdings | American Express vs. Upstart Holdings | American Express vs. Mastercard |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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