Correlation Between American Express and Greenidge Generation

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

By analyzing existing cross correlation between American Express and Greenidge Generation Holdings, you can compare the effects of market volatilities on American Express and Greenidge Generation 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 Greenidge Generation. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Greenidge Generation.

Diversification Opportunities for American Express and Greenidge Generation

0.53

Correlation Coefficient

American Express  Greenidge Generation

Very weak diversification

The 3 months correlation between American and Greenidge is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Greenidge Generation Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenidge Generation 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 Greenidge Generation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenidge Generation has no effect on the direction of American Express i.e., American Express and Greenidge Generation go up and down completely randomly.

Pair Corralation between American Express and Greenidge Generation

Considering the 90-day investment horizon American Express is expected to generate 6.23 times less return on investment than Greenidge Generation. But when comparing it to its historical volatility, American Express is 4.77 times less risky than Greenidge Generation. It trades about 0.09 of its potential returns per unit of risk. Greenidge Generation Holdings is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  100.00  in Greenidge Generation Holdings on May 6, 2025 and sell it today you would earn a total of  50.00  from holding Greenidge Generation Holdings or generate 50.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

American Express  vs.  Greenidge Generation Holdings

American Express

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in American Express are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, American Express may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Greenidge Generation

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Greenidge Generation Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Greenidge Generation exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with American Express and Greenidge Generation

The main advantage of trading using opposite American Express and Greenidge Generation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Greenidge Generation 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 Greenidge Generation will offset losses from the drop in Greenidge Generation's long position.

The idea behind American Express and Greenidge Generation Holdings 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.