Correlation Between Greenwich Lifesciences and American Express

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

Diversification Opportunities for Greenwich Lifesciences and American Express

0.01
  Correlation Coefficient

Significant diversification

The 3 months correlation between Greenwich and American is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Greenwich Lifesciences and American Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express and Greenwich Lifesciences 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 Greenwich Lifesciences 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 Greenwich Lifesciences i.e., Greenwich Lifesciences and American Express go up and down completely randomly.

Pair Corralation between Greenwich Lifesciences and American Express

Given the investment horizon of 90 days Greenwich Lifesciences is expected to generate 1.55 times less return on investment than American Express. In addition to that, Greenwich Lifesciences is 5.84 times more volatile than American Express. It trades about 0.04 of its total potential returns per unit of risk. American Express is currently generating about 0.39 per unit of volatility. If you would invest  14,058  in American Express on May 12, 2022 and sell it today you would earn a total of  2,193  from holding American Express or generate 15.6% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Greenwich Lifesciences  vs.  American Express

 Performance (%) 
       Timeline  
Greenwich Lifesciences 
Greenwich Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Greenwich Lifesciences are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Greenwich Lifesciences may actually be approaching a critical reversion point that can send shares even higher in September 2022.

Greenwich Price Channel

American Express 
American Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in American Express are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, American Express may actually be approaching a critical reversion point that can send shares even higher in September 2022.

American Price Channel

Greenwich Lifesciences and American Express Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Greenwich Lifesciences and American Express

The main advantage of trading using opposite Greenwich Lifesciences and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenwich Lifesciences 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.

Greenwich Lifesciences

Pair trading matchups for Greenwich Lifesciences

The idea behind Greenwich Lifesciences 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.
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 Global Correlations module to find global opportunities by holding instruments from different markets.

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