Correlation Between Solidion Technology and American Express

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

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

Diversification Opportunities for Solidion Technology and American Express

-0.29

Correlation Coefficient

Solidion Technology  American Express

Very good diversification

The 3 months correlation between Solidion and American is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Solidion Technology and American Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express and Solidion Technology 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 Solidion Technology 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 Solidion Technology i.e., Solidion Technology and American Express go up and down completely randomly.

Pair Corralation between Solidion Technology and American Express

Considering the 90-day investment horizon Solidion Technology is expected to generate 18.13 times more return on investment than American Express. However, Solidion Technology is 18.13 times more volatile than American Express. It trades about 0.04 of its potential returns per unit of risk. American Express is currently generating about 0.15 per unit of risk. If you would invest  453.00  in Solidion Technology on February 2, 2024 and sell it today you would lose (237.00) from holding Solidion Technology or give up 52.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Solidion Technology  vs.  American Express

Solidion Technology

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Solidion Technology are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Solidion Technology demonstrated solid returns over the last few months and may actually be approaching a breakup point.

American Express

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in American Express are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, American Express may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Solidion Technology and American Express

The main advantage of trading using opposite Solidion Technology and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solidion Technology 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 Solidion Technology 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.