Correlation Between Q3 All-Weather and American Express

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Can any of the company-specific risk be diversified away by investing in both Q3 All-Weather 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 Q3 All-Weather and American Express into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Q3 All-Weather Tactical and American Express, you can compare the effects of market volatilities on Q3 All-Weather 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 Q3 All-Weather with a short position of American Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Q3 All-Weather and American Express.

Diversification Opportunities for Q3 All-Weather and American Express

0.31
  Correlation Coefficient

Weak diversification

The 3 months correlation between QACTX and American is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Q3 All-Weather Tactical and American Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express and Q3 All-Weather 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 Q3 All-Weather Tactical 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 Q3 All-Weather i.e., Q3 All-Weather and American Express go up and down completely randomly.

Pair Corralation between Q3 All-Weather and American Express

Assuming the 90 days horizon Q3 All-Weather Tactical is expected to generate 0.46 times more return on investment than American Express. However, Q3 All-Weather Tactical is 2.18 times less risky than American Express. It trades about -0.18 of its potential returns per unit of risk. American Express is currently generating about -0.14 per unit of risk. If you would invest  912.00  in Q3 All-Weather Tactical on July 3, 2022 and sell it today you would lose (59.00)  from holding Q3 All-Weather Tactical or give up 6.47% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy97.73%
ValuesDaily Returns

Q3 All-Weather Tactical  vs.  American Express

 Performance (%) 
       Timeline  
Q3 All-Weather Tactical 
QACTX Performance
0 of 100
Over the last 90 days Q3 All-Weather Tactical has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest abnormal performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

QACTX 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 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

Q3 All-Weather and American Express Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Q3 All-Weather and American Express

The main advantage of trading using opposite Q3 All-Weather and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Q3 All-Weather 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.
Q3 All-Weather vs. The Travelers Companies
The idea behind Q3 All-Weather Tactical 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.

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