Correlation Between Charter Communications and American Express
Can any of the company-specific risk be diversified away by investing in both Charter Communications and American Express 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 Charter Communications and American Express into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charter Communications Cl and American Express Co, you can compare the effects of market volatilities on Charter Communications and American Express 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 Charter Communications with a short position of American Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Communications and American Express.
Diversification Opportunities for Charter Communications and American Express
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Charter and American is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Charter Communications Cl and American Express Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express and Charter Communications 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 Charter Communications Cl are associated (or correlated) with American Express. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Express has no effect on the direction of Charter Communications i.e., Charter Communications and American Express go up and down completely randomly.
Pair Corralation between Charter Communications and American Express
Assuming the 90 days trading horizon Charter Communications is expected to generate 1.31 times less return on investment than American Express. In addition to that, Charter Communications is 1.84 times more volatile than American Express Co. It trades about 0.06 of its total potential returns per unit of risk. American Express Co is currently generating about 0.14 per unit of volatility. If you would invest 26,494 in American Express Co on September 24, 2024 and sell it today you would earn a total of 3,474 from holding American Express Co or generate 13.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Charter Communications Cl vs. American Express Co
Performance |
Timeline |
Charter Communications |
American Express |
Charter Communications and American Express Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Charter Communications and American Express
The main advantage of trading using opposite Charter Communications and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Communications position performs unexpectedly, American Express 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 American Express will offset losses from the drop in American Express' long position.Charter Communications vs. Uniper SE | Charter Communications vs. Mulberry Group PLC | Charter Communications vs. London Security Plc | Charter Communications vs. Triad Group PLC |
American Express vs. Uniper SE | American Express vs. Mulberry Group PLC | American Express vs. London Security Plc | American Express vs. Triad Group PLC |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Content Syndication Quickly integrate customizable finance content to your own investment portal |