Correlation Between American Express and 446150AV6

Can any of the company-specific risk be diversified away by investing in both American Express and 446150AV6 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 446150AV6 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between American Express and HBAN 445, you can compare the effects of market volatilities on American Express and 446150AV6 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 446150AV6. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and 446150AV6.

Diversification Opportunities for American Express and 446150AV6

0.15

Correlation Coefficient

American Express  446150AV6

Average diversification

The 3 months correlation between American and 446150AV6 is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding American Express and HBAN 445 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 446150AV6 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 446150AV6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 446150AV6 has no effect on the direction of American Express i.e., American Express and 446150AV6 go up and down completely randomly.

Pair Corralation between American Express and 446150AV6

Considering the 90-day investment horizon American Express is expected to under-perform the 446150AV6. In addition to that, American Express is 1.01 times more volatile than HBAN 445. It trades about -0.49 of its total potential returns per unit of risk. HBAN 445 is currently generating about -0.19 per unit of volatility. If you would invest  9,627  in HBAN 445 on December 10, 2024 and sell it today you would lose (626.00) from holding HBAN 445 or give up 6.5% of portfolio value over 90 days.

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

American Express  vs.  HBAN 445

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 abnormal performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

446150AV6

Risk-Adjusted Performance

Weak

Over the last 90 days HBAN 445 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 446150AV6 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with American Express and 446150AV6

The main advantage of trading using opposite American Express and 446150AV6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, 446150AV6 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 446150AV6 will offset losses from the drop in 446150AV6's long position.

The idea behind American Express and HBAN 445 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..