Correlation Between American Express and Perrigo

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both American Express and Perrigo 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 Perrigo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Perrigo Company, you can compare the effects of market volatilities on American Express and Perrigo 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 Perrigo. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Perrigo.

Diversification Opportunities for American Express and Perrigo

-0.48
  Correlation Coefficient

Very good diversification

The 3 months correlation between American and Perrigo is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Perrigo Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perrigo Company 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 Perrigo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perrigo Company has no effect on the direction of American Express i.e., American Express and Perrigo go up and down completely randomly.

Pair Corralation between American Express and Perrigo

Considering the 90-day investment horizon American Express is expected to generate 1.1 times more return on investment than Perrigo. However, American Express is 1.1 times more volatile than Perrigo Company. It trades about 0.05 of its potential returns per unit of risk. Perrigo Company is currently generating about -0.02 per unit of risk. If you would invest  9,127  in American Express on April 4, 2022 and sell it today you would earn a total of  4,913  from holding American Express or generate 53.83% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

American Express  vs.  Perrigo Company

 Performance (%) 
      Timeline 
American Express 
American Performance
0 of 100
Over the last 90 days American Express has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in August 2022. The recent disarray may also be a sign of long period up-swing for the firm insiders.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0148
Payout Ratio
0.19
Last Split Factor
10000:8753
Forward Annual Dividend Rate
2.08
Dividend Date
2022-08-10
Ex Dividend Date
2022-06-30
Last Split Date
2005-10-03

American Price Channel

Perrigo Company 
Perrigo Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Perrigo Company are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady technical and fundamental indicators, Perrigo may actually be approaching a critical reversion point that can send shares even higher in August 2022.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0256
Payout Ratio
0.53
Last Split Factor
2:1
Forward Annual Dividend Rate
1.04
Dividend Date
2022-06-21
Ex Dividend Date
2022-06-02
Last Split Date
1993-08-26

Perrigo Price Channel

American Express and Perrigo Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with American Express and Perrigo

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

American Express

Pair trading matchups for American Express

The idea behind American Express and Perrigo Company 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 CEO Directory module to screen CEOs from public companies around the world.

Other Complementary Tools

Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Go
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Transaction History
View history of all your transactions and understand their impact on performance
Go
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Go
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Go
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Go
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Go