Correlation Between American Express and NOVARTIS
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By analyzing existing cross correlation between American Express and NOVARTIS CAP P, you can compare the effects of market volatilities on American Express and NOVARTIS 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 NOVARTIS. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and NOVARTIS.
Diversification Opportunities for American Express and NOVARTIS
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and NOVARTIS is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding American Express and NOVARTIS CAP P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOVARTIS CAP P 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 NOVARTIS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOVARTIS CAP P has no effect on the direction of American Express i.e., American Express and NOVARTIS go up and down completely randomly.
Pair Corralation between American Express and NOVARTIS
Considering the 90-day investment horizon American Express is expected to generate 6.75 times more return on investment than NOVARTIS. However, American Express is 6.75 times more volatile than NOVARTIS CAP P. It trades about 0.18 of its potential returns per unit of risk. NOVARTIS CAP P is currently generating about -0.13 per unit of risk. If you would invest 25,449 in American Express on September 12, 2024 and sell it today you would earn a total of 4,797 from holding American Express or generate 18.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 96.88% |
Values | Daily Returns |
American Express vs. NOVARTIS CAP P
Performance |
Timeline |
American Express |
NOVARTIS CAP P |
American Express and NOVARTIS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Express and NOVARTIS
The main advantage of trading using opposite American Express and NOVARTIS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, NOVARTIS 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 NOVARTIS will offset losses from the drop in NOVARTIS's long position.American Express vs. Victory Integrity Smallmid Cap | American Express vs. Hilton Worldwide Holdings | American Express vs. NVIDIA | American Express vs. JPMorgan Chase Co |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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