Correlation Between American Express and 26442CAE4

Can any of the company-specific risk be diversified away by investing in both American Express and 26442CAE4 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 26442CAE4 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between American Express and DUKE ENERGY CAROLINAS, you can compare the effects of market volatilities on American Express and 26442CAE4 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 26442CAE4. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and 26442CAE4.

Diversification Opportunities for American Express and 26442CAE4

-0.37

Correlation Coefficient

American Express  26442CAE4

Very good diversification

The 3 months correlation between American and 26442CAE4 is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding American Express and DUKE ENERGY CAROLINAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DUKE ENERGY CAROLINAS 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 26442CAE4. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DUKE ENERGY CAROLINAS has no effect on the direction of American Express i.e., American Express and 26442CAE4 go up and down completely randomly.

Pair Corralation between American Express and 26442CAE4

Considering the 90-day investment horizon American Express is expected to under-perform the 26442CAE4. In addition to that, American Express is 1.23 times more volatile than DUKE ENERGY CAROLINAS. It trades about -0.08 of its total potential returns per unit of risk. DUKE ENERGY CAROLINAS is currently generating about 0.08 per unit of volatility. If you would invest  10,609  in DUKE ENERGY CAROLINAS on December 26, 2024 and sell it today you would earn a total of  479.00  from holding DUKE ENERGY CAROLINAS or generate 4.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	68.85%
Values	Daily Returns

American Express  vs.  DUKE ENERGY CAROLINAS

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.

DUKE ENERGY CAROLINAS

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in DUKE ENERGY CAROLINAS are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, 26442CAE4 may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with American Express and 26442CAE4

The main advantage of trading using opposite American Express and 26442CAE4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, 26442CAE4 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 26442CAE4 will offset losses from the drop in 26442CAE4's long position.

The idea behind American Express and DUKE ENERGY CAROLINAS 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.