Correlation Between Perrigo and American Express

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

Diversification Opportunities for Perrigo and American Express

-0.51
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Perrigo and American is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Perrigo Company and American Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express and Perrigo 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 Perrigo Company 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 Perrigo i.e., Perrigo and American Express go up and down completely randomly.

Pair Corralation between Perrigo and American Express

Given the investment horizon of 90 days Perrigo Company is expected to generate 0.84 times more return on investment than American Express. However, Perrigo Company is 1.19 times less risky than American Express. It trades about -0.01 of its potential returns per unit of risk. American Express is currently generating about -0.02 per unit of risk. If you would invest  4,331  in Perrigo Company on April 7, 2022 and sell it today you would lose (258.00)  from holding Perrigo Company or give up 5.96% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Perrigo Company  vs.  American Express

 Performance (%) 
      Timeline 
Perrigo Company 
Perrigo Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Perrigo Company are ranked lower than 7 (%) 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 
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 and American Express Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Perrigo and American Express

The main advantage of trading using opposite Perrigo and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perrigo 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.
The idea behind Perrigo Company 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 Commodity Channel Index module to use Commodity Channel Index to analyze current equity momentum.

Other Complementary Tools

ETF Directory
Find actively traded Exchange Traded Funds (ETF) from around the world
Go
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Go
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Go
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Go
Fund Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Go
Fundamental Analysis
View fundamental data based on most recent published financial statements
Go
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Go
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Go
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Go
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Go