Correlation Between Resource America and American Express

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Can any of the company-specific risk be diversified away by investing in both Resource America 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 Resource America and American Express into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Resource America and American Express, you can compare the effects of market volatilities on Resource America 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 Resource America with a short position of American Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Resource America and American Express.

Diversification Opportunities for Resource America and American Express

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Resource America and American Express

If you would invest  17,311  in American Express on December 30, 2023 and sell it today you would earn a total of  5,458  from holding American Express or generate 31.53% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Resource America  vs.  American Express

 Performance 
       Timeline  
Resource America 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Resource America has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Resource America is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.
American Express 

Risk-Adjusted Performance

19 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in American Express are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, American Express reported solid returns over the last few months and may actually be approaching a breakup point.

Resource America and American Express Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Resource America and American Express

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

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