Correlation Between IRSA Propiedades and American Express

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

By analyzing existing cross correlation between IRSA Propiedades Comerciales and American Express Co, you can compare the effects of market volatilities on IRSA Propiedades 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 IRSA Propiedades with a short position of American Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of IRSA Propiedades and American Express.

Diversification Opportunities for IRSA Propiedades and American Express

0.0

Correlation Coefficient

IRSA Propiedades  American Express

Pay attention - limited upside

The 3 months correlation between IRSA and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding IRSA Propiedades Comerciales and American Express Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express and IRSA Propiedades 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 IRSA Propiedades Comerciales 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 IRSA Propiedades i.e., IRSA Propiedades and American Express go up and down completely randomly.

Pair Corralation between IRSA Propiedades and American Express

If you would invest  2,167,500  in American Express Co on September 15, 2024 and sell it today you would earn a total of  30,000  from holding American Express Co or generate 1.38% return on investment over 90 days.

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

IRSA Propiedades Comerciales  vs.  American Express Co

IRSA Propiedades Com

Risk-Adjusted Performance

0 of 100

Very Weak

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

American Express

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in American Express Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, American Express is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with IRSA Propiedades and American Express

The main advantage of trading using opposite IRSA Propiedades and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IRSA Propiedades 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.

The idea behind IRSA Propiedades Comerciales and American Express Co 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.