Correlation Between American Express and MBGGR

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

By analyzing existing cross correlation between American Express and MBGGR 35 03 AUG 25, you can compare the effects of market volatilities on American Express and MBGGR 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 MBGGR. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and MBGGR.

Diversification Opportunities for American Express and MBGGR

0.81

Correlation Coefficient

American Express  MBGGR

Very poor diversification

The 3 months correlation between American and MBGGR is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding American Express and MBGGR 35 03 AUG 25 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MBGGR 35 03 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 MBGGR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MBGGR 35 03 has no effect on the direction of American Express i.e., American Express and MBGGR go up and down completely randomly.

Pair Corralation between American Express and MBGGR

Considering the 90-day investment horizon American Express is expected to generate 1.7 times more return on investment than MBGGR. However, American Express is 1.7 times more volatile than MBGGR 35 03 AUG 25. It trades about -0.01 of its potential returns per unit of risk. MBGGR 35 03 AUG 25 is currently generating about -0.33 per unit of risk. If you would invest  30,226  in American Express on October 1, 2024 and sell it today you would lose (121.00) from holding American Express or give up 0.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	40.0%
Values	Daily Returns

American Express  vs.  MBGGR 35 03 AUG 25

American Express

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in American Express are ranked lower than 9 (%) 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 January 2025.

MBGGR 35 03

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MBGGR 35 03 AUG 25 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for MBGGR 35 03 AUG 25 investors.

Pair Trading with American Express and MBGGR

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

The idea behind American Express and MBGGR 35 03 AUG 25 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.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.