American Stock Volatility

AXP
 Stock
  

USD 165.40  0.44  0.27%   

We consider American Express very steady. American Express secures Sharpe Ratio (or Efficiency) of 0.0577, which signifies that the company had 0.0577% of return per unit of standard deviation over the last 3 months. Our philosophy in foreseeing the volatility of a stock is to use all available market data together with stock-specific technical indicators that cannot be diversified away. We have found twenty-eight technical indicators for American Express, which you can use to evaluate the future volatility of the firm. Please confirm American Express risk adjusted performance of 0.0524, and Mean Deviation of 1.75 to double-check if the risk estimate we provide is consistent with the expected return of 0.12%.
  
American Express Stock volatility depicts how high the prices fluctuate around the mean (or its average) price. In other words, it is a statistical measure of the distribution of American daily returns, and it is calculated using variance and standard deviation. We also use American's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of American Express volatility.

30 Days Market Risk

Very steady

Chance of Distress

Below Average

30 Days Economic Sensitivity

Responds to the market

ESG Sustainability

While most ESG disclosures are voluntary, American Express' sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to American Express' managers and investors.
Environment Score
Governance Score
Social Score
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as American Express can benefit from it. Downward market volatility can be a perfect environment for investors who play the long game. Here, they may decide to buy additional stocks of American Express at lower prices. For example, an investor can purchase American stock that has halved in price over a short period. This will lower your average cost per share, thereby improving your portfolio's performance when the markets normalize. Similarly, when the prices of American Express' stock rises, investors can sell out and invest the proceeds in other equities with better opportunities. Investing when markets are volatile with better valuations will accord both investors and companies the opportunity to generate better long-term returns.

Moving together with American Express

0.65AGMFederal AgriculturalPairCorr
0.72ALLYAlly Financial TrendingPairCorr

American Express Market Sensitivity And Downside Risk

American Express' beta coefficient measures the volatility of American stock compared to the systematic risk of the entire stock market represented by your selected benchmark. In mathematical terms, beta represents the slope of the line through a regression of data points where each of these points represents American stock's returns against your selected market. In other words, American Express's beta of 1.46 provides an investor with an approximation of how much risk American Express stock can potentially add to one of your existing portfolios.
American Express currently demonstrates below-average downside deviation. It has Information Ratio of -0.01 and Jensen Alpha of -0.06. However, we advise investors to further question American Express expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure American Express' stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact American Express' stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

American Express Implied Volatility

American Express' implied volatility exposes the market's sentiment of American Express stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if American Express' implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that American Express stock will not fluctuate a lot when American Express' options are near their expiration.
3 Months Beta |Analyze American Express Demand Trend
Check current 90 days American Express correlation with market (DOW)

American Beta

    
  1.46  
American standard deviation measures the daily dispersion of prices over your selected time horizon relative to its mean. Typical volatile equity has a high standard deviation, while the deviation of a stable instrument is usually low. As a downside, the standard deviation calculates all uncertainty as risk, even when it is in your favor, such as above-average returns.

Standard Deviation

    
  2.15  
It is essential to understand the difference between upside risk (as represented by American Express's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of American Express' daily returns or price. Since the actual investment returns on holding a position in american stock tend to have a non-normal distribution, there will be different probabilities for losses than for gains. The likelihood of losses is reflected in the downside risk of an investment in American Express.

Using American Put Option to Manage Risk

Put options written on American Express grant holders of the option the right to sell a specified amount of American Express at a specified price within a specified time frame. The put buyer has a limited loss and, while not fully unlimited gains, as the price of American Stock cannot fall below zero, the put buyer does gain as the price drops. So, one way investors can hedge American Express' position is by buying a put option against it. The put option used this way is usually referred to as insurance. If an undesired outcome occurs and loss on holding American Express will be realized, the loss incurred will be offset by the profits made with the option trade.

American Express' PUT expiring on 2022-08-19

   Profit   
Share
       American Express Price At Expiration  

Current American Express Insurance Chain

DeltaGammaOpen IntExpirationCurrent SpreadLast Price
Put
2022-08-19 PUT at $170.0-0.78450.0576292022-08-194.6 - 4.97.35View
Put
2022-08-19 PUT at $167.5-0.60840.0691172022-08-192.92 - 3.153.14View
Put
2022-08-19 PUT at $165.0-0.43110.07071012022-08-191.72 - 1.891.99View
Put
2022-08-19 PUT at $162.5-0.27190.05756932022-08-190.94 - 1.070.98View
Put
2022-08-19 PUT at $160.0-0.15930.0397972022-08-190.51 - 0.570.52View
Put
2022-08-19 PUT at $157.5-0.09080.02515002022-08-190.25 - 0.320.28View
Put
2022-08-19 PUT at $155.0-0.0530.01535302022-08-190.15 - 0.190.16View
Put
2022-08-19 PUT at $152.5-0.03730.01034922022-08-190.09 - 0.120.12View
Put
2022-08-19 PUT at $150.0-0.0220.00638962022-08-190.05 - 0.080.07View
Put
2022-08-19 PUT at $149.0-0.01870.00535792022-08-190.05 - 0.080.06View
Put
2022-08-19 PUT at $148.0-0.01780.00481342022-08-190.0 - 0.070.06View
View All American Express Options

American Express Stock Volatility Analysis

Volatility refers to the frequency at which American Express stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with American Express' price changes. Investors will then calculate the volatility of American Express' stock to predict their future moves. A stock that has erratic price changes quickly hits new highs, and lows are considered highly volatile. A stock with relatively stable price changes has low volatility. A highly volatile stock is riskier, but the risk cuts both ways. Investing in highly volatile security can either be highly successful, or you may experience significant failure. There are two main types of American Express' volatility:

Historical Volatility

This type of stock volatility measures American Express' fluctuations based on previous trends. It's commonly used to predict American Express' future behavior based on its past. However, it cannot conclusively determine the future direction of the stock.

Implied Volatility

This type of volatility provides a positive outlook on future price fluctuations for American Express' current market price. This means that the stock will return to its initially predicted market price.
Transformation
The output start index for this execution was zero with a total number of output elements of sixty-one. American Express Average Price is the average of the sum of open, high, low and close daily prices of a bar. It can be used to smooth an indicator that normally takes just the closing price as input.
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American Express Projected Return Density Against Market

Considering the 90-day investment horizon the stock has the beta coefficient of 1.4596 . This suggests as the benchmark fluctuates upward, the company is expected to outperform it on average. However, if the benchmark returns are projected to be negative, American Express will likely underperform.
Most traded equities are subject to two types of risk - systematic (i.e., market) and unsystematic (i.e., nonmarket or company-specific) risk. Unsystematic risk is the risk that events specific to American Express or Financial Services sector will adversely affect the stock's price. This type of risk can be diversified away by owning several different stocks in different industries whose stock prices have shown a small correlation to each other. On the other hand, systematic risk is the risk that American Express' price will be affected by overall stock market movements and cannot be diversified away. So, no matter how many positions you have, you cannot eliminate market risk. However, you can measure a American stock's historical response to market movements and buy it if you are comfortable with its volatility direction. Beta and standard deviation are two commonly used measures to help you make the right decision.
The company has a negative alpha, implying that the risk taken by holding this instrument is not justified. American Express is significantly underperforming DOW.
   Predicted Return Density   
       Returns  
American Express' volatility is measured either by using standard deviation or beta. Standard deviation will reflect the average amount of how american stock's price will differ from the mean after some time.To get its calculation, you should first determine the mean price during the specified period then subtract that from each price point.

What Drives an American Express Price Volatility?

Several factors can influence a Stock's stock volatility:

Industry

Specific events can influence volatility within a particular industry. For instance, a significant weather upheaval in a crucial oil-production site may cause oil prices to increase in the oil sector. The direct result will be the rise in the stock price of oil distribution companies. Similarly, any government regulation in a specific industry could negatively influence stock prices due to increased regulations on compliance that may impact the company's future earnings and growth.

Political and Economic environment

When governments make significant decisions regarding trade agreements, policies, and legislation regarding specific industries, they will influence stock prices. Everything from speeches to elections may influence investors, who can directly influence the stock prices in any particular industry. The prevailing economic situation also plays a significant role in stock prices. When the economy is doing well, investors will have a positive reaction and hence, better stock prices and vice versa.

The Company's Performance

Sometimes volatility will only affect an individual company. For example, a revolutionary product launch or strong earnings report may attract many investors to purchase the company. This positive attention will raise the company's stock price. In contrast, product recalls and data breaches may negatively influence a company's stock prices.

American Express Stock Risk Measures

Most traded equities are subject to two types of risk - systematic (i.e., market) and unsystematic (i.e., nonmarket or company-specific) risk. Unsystematic risk is the risk that events specific to American Express or Financial Services sector will adversely affect the stock's price. This type of risk can be diversified away by owning several different stocks in different industries whose stock prices have shown a small correlation to each other. On the other hand, systematic risk is the risk that American Express' price will be affected by overall stock market movements and cannot be diversified away. So, no matter how many positions you have, you cannot eliminate market risk. However, you can measure a American stock's historical response to market movements and buy it if you are comfortable with its volatility direction. Beta and standard deviation are two commonly used measures to help you make the right decision.
Considering the 90-day investment horizon the coefficient of variation of American Express is 1733.91. The daily returns are distributed with a variance of 4.6 and standard deviation of 2.15. The mean deviation of American Express is currently at 1.63. For similar time horizon, the selected benchmark (DOW) has volatility of 1.25
α
Alpha over DOW
-0.06
β
Beta against DOW1.46
σ
Overall volatility
2.15
Ir
Information ratio -0.0074

American Express Stock Return Volatility

American Express historical daily return volatility represents how much of American Express stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The firm has volatility of 2.1453% on return distribution over 90 days investment horizon. By contrast, DOW inherits 1.181% risk (volatility on return distribution) over the 90 days horizon.
 Performance (%) 
       Timeline  

About American Express Volatility

Volatility is a rate at which the price of American Express or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of American Express may increase or decrease. In other words, similar to American's beta indicator, it measures the risk of American Express and helps estimate the fluctuations that may happen in a short period of time. So if prices of American Express fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility.
Please read more on our technical analysis page.
Last ReportedProjected for 2022
Market Capitalization126.7 B116.3 B
American Express Company, together with its subsidiaries, provides charge and credit payment card products, and travel-related services worldwide. American Express Company was founded in 1850 and is headquartered in New York, New York. American Express operates under Credit Services classification in the United States and is traded on New York Stock Exchange. It employs 64000 people.

American Express Investment Opportunity

American Express has a volatility of 2.15 and is 1.82 times more volatile than DOW. 18  of all equities and portfolios are less risky than American Express. Compared to the overall equity markets, volatility of historical daily returns of American Express is lower than 18 () of all global equities and portfolios over the last 90 days.
Use American Express to protect your portfolios against small market fluctuations. Benchmarks are essential to demonstrate the utility of optimization algorithms. The stock experiences a normal downward trend and little activity. Check odds of American Express to be traded at $163.75 in 90 days. .

Very poor diversification

The correlation between American Express and DJI is Very poor diversification for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding American Express and DJI in the same portfolio, assuming nothing else is changed.

American Express Additional Risk Indicators

The analysis of American Express' secondary risk indicators is one of the essential steps in making a buy or sell decision. The process involves identifying the amount of risk involved in American Express' investment and either accepting that risk or mitigating it. Along with some common measures of American Express stock's risk such as standard deviation, beta, or value at risk, we also provide a set of secondary indicators that can assist in the individual investment decision or help in hedging the risk of your existing portfolios.
Risk Adjusted Performance0.0524
Market Risk Adjusted Performance0.0627
Mean Deviation1.75
Semi Deviation2.22
Downside Deviation2.28
Coefficient Of Variation2597.74
Standard Deviation2.26
Please note, the risk measures we provide can be used independently or collectively to perform a risk assessment. When comparing two potential stocks, we recommend comparing similar stocks with homogenous growth potential and valuation from related markets to determine which investment holds the most risk.

American Express Suggested Diversification Pairs

Pair trading is one of the very effective strategies used by professional day traders and hedge funds capitalizing on short-time and mid-term market inefficiencies. The approach is based on the fact that the ratio of prices of two correlating shares is long-term stable and oscillates around the average value. If the correlation ratio comes outside the common area, you can speculate with a high success rate that the ratio will return to the mean value and collect a profit.
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The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against American Express as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. American Express' systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, American Express' unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to American Express.
Please continue to Trending Equities. Note that the American Express information on this page should be used as a complementary analysis to other American Express' statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Price Transformation module to use Price Transformation models to analyze depth of different equity instruments across global markets.

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When running American Express price analysis, check to measure American Express' market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy American Express is operating at the current time. Most of American Express' value examination focuses on studying past and present price action to predict the probability of American Express' future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move American Express' price. Additionally, you may evaluate how the addition of American Express to your portfolios can decrease your overall portfolio volatility.
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Is American Express' industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of American Express. If investors know American will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about American Express listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth YOY
-0.082
Market Capitalization
124.3 B
Quarterly Revenue Growth YOY
0.2
Return On Assets
0.0388
Return On Equity
0.31
The market value of American Express is measured differently than its book value, which is the value of American that is recorded on the company's balance sheet. Investors also form their own opinion of American Express' value that differs from its market value or its book value, called intrinsic value, which is American Express' true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because American Express' market value can be influenced by many factors that don't directly affect American Express' underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between American Express' value and its price as these two are different measures arrived at by different means. Investors typically determine American Express value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, American Express' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.