Correlation Between Verizon Communications and American Express

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

Diversification Opportunities for Verizon Communications and American Express

-0.59
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Verizon and American is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Verizon Communications and American Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express and Verizon Communications 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 Verizon Communications 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 Verizon Communications i.e., Verizon Communications and American Express go up and down completely randomly.

Pair Corralation between Verizon Communications and American Express

Allowing for the 90-day total investment horizon Verizon Communications is expected to under-perform the American Express. But the stock apears to be less risky and, when comparing its historical volatility, Verizon Communications is 2.01 times less risky than American Express. The stock trades about -0.06 of its potential returns per unit of risk. The American Express is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  10,134  in American Express on June 27, 2022 and sell it today you would earn a total of  3,892  from holding American Express or generate 38.41% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Verizon Communications  vs.  American Express

 Performance (%) 
       Timeline  
Verizon Communications 
Verizon Performance
0 of 100
Over the last 90 days Verizon Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in October 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Verizon 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

Verizon Communications and American Express Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Verizon Communications and American Express

The main advantage of trading using opposite Verizon Communications and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Verizon Communications 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.
Verizon Communications vs. BUSHVELD MINERALS LTD
The idea behind Verizon Communications 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. Sigma Lithium Corp
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

Other Complementary Tools

Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Go
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Go
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Go
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Go
Shere Portfolio
Track or share privately all of your investments from the convenience of any device
Go
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Go
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Go