Correlation Between Green Dot and American Express

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Can any of the company-specific risk be diversified away by investing in both Green Dot 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 Green Dot and American Express into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Dot Corp and American Express, you can compare the effects of market volatilities on Green Dot 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 Green Dot with a short position of American Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Dot and American Express.

Diversification Opportunities for Green Dot and American Express

0.03
  Correlation Coefficient

Significant diversification

The 3 months correlation between Green and American is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Green Dot Corp and American Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express and Green Dot 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 Green Dot Corp 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 Green Dot i.e., Green Dot and American Express go up and down completely randomly.

Pair Corralation between Green Dot and American Express

Given the investment horizon of 90 days Green Dot Corp is expected to under-perform the American Express. In addition to that, Green Dot is 1.29 times more volatile than American Express. It trades about -0.09 of its total potential returns per unit of risk. American Express is currently generating about -0.02 per unit of volatility. If you would invest  17,189  in American Express on July 7, 2022 and sell it today you would lose (2,877)  from holding American Express or give up 16.74% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Green Dot Corp  vs.  American Express

 Performance (%) 
       Timeline  
Green Dot Corp 
Green Performance
0 of 100
Over the last 90 days Green Dot Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of sluggish performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in November 2022. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Green Price Channel

American Express 
American Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in American Express are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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

Green Dot and American Express Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Green Dot and American Express

The main advantage of trading using opposite Green Dot and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Dot 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.
Green Dot vs. Paypal Holdings
The idea behind Green Dot Corp 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.
American Express vs. Paypal Holdings
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.

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