Correlation Between American Express and Trivago NV

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

Diversification Opportunities for American Express and Trivago NV

0.63
  Correlation Coefficient

Poor diversification

The 3 months correlation between American and Trivago is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Trivago NV ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trivago NV ADR 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 Trivago NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trivago NV ADR has no effect on the direction of American Express i.e., American Express and Trivago NV go up and down completely randomly.

Pair Corralation between American Express and Trivago NV

Considering the 90-day investment horizon American Express is expected to generate 0.71 times more return on investment than Trivago NV. However, American Express is 1.41 times less risky than Trivago NV. It trades about -0.09 of its potential returns per unit of risk. Trivago NV ADR is currently generating about -0.11 per unit of risk. If you would invest  15,163  in American Express on June 27, 2022 and sell it today you would lose (1,137)  from holding American Express or give up 7.5% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

American Express  vs.  Trivago NV ADR

 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 very healthy basic indicators, American Express is not utilizing all of its potentials. The new stock price disarray, may contribute to short-term losses for the insiders.

American Price Channel

Trivago NV ADR 
Trivago Performance
0 of 100
Over the last 90 days Trivago NV ADR 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 rather sound which may send shares a bit higher in October 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Trivago Price Channel

American Express and Trivago NV Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with American Express and Trivago NV

The main advantage of trading using opposite American Express and Trivago NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Trivago NV 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 Trivago NV will offset losses from the drop in Trivago NV's long position.
American Express vs. Sigma Lithium Corp
The idea behind American Express and Trivago NV ADR 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.
Trivago NV vs. Industrias Bachoco SA
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.

Other Complementary Tools

Transaction History
View history of all your transactions and understand their impact on performance
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Go
Piotroski F Score
Get Piotroski F Score based on binary analysis strategy of nine different fundamentals
Go
Probability Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Go
Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Go
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Go
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Go
Equity Valuation
Check real value of public entities based on technical and fundamental data
Go
Price Transformation
Use Price Transformation models to analyze depth of different equity instruments across global markets
Go