Correlation Between American Express and Intouch Insight

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

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

Diversification Opportunities for American Express and Intouch Insight

-0.28

Correlation Coefficient

American Express  Intouch Insight

Very good diversification

The 3 months correlation between American and Intouch is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Intouch Insight in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intouch Insight 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 Intouch Insight. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intouch Insight has no effect on the direction of American Express i.e., American Express and Intouch Insight go up and down completely randomly.

Pair Corralation between American Express and Intouch Insight

Considering the 90-day investment horizon American Express is expected to generate 0.42 times more return on investment than Intouch Insight. However, American Express is 2.39 times less risky than Intouch Insight. It trades about 0.09 of its potential returns per unit of risk. Intouch Insight is currently generating about -0.03 per unit of risk. If you would invest  27,733  in American Express on May 3, 2025 and sell it today you would earn a total of  2,198  from holding American Express or generate 7.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

American Express  vs.  Intouch Insight

American Express

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in American Express are ranked lower than 6 (%) 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.

Intouch Insight

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intouch Insight has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Intouch Insight is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with American Express and Intouch Insight

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

The idea behind American Express and Intouch Insight 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.

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.