Correlation Between American Express and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both American Express and Emerging Markets 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 American Express and Emerging Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Emerging Markets Equity, you can compare the effects of market volatilities on American Express and Emerging Markets 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 American Express with a short position of Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Emerging Markets.
Diversification Opportunities for American Express and Emerging Markets
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and Emerging is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Emerging Markets Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets Equity and American Express 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 American Express are associated (or correlated) with Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets Equity has no effect on the direction of American Express i.e., American Express and Emerging Markets go up and down completely randomly.
Pair Corralation between American Express and Emerging Markets
Considering the 90-day investment horizon American Express is expected to generate 1.97 times more return on investment than Emerging Markets. However, American Express is 1.97 times more volatile than Emerging Markets Equity. It trades about 0.09 of its potential returns per unit of risk. Emerging Markets Equity is currently generating about 0.14 per unit of risk. If you would invest 30,171 in American Express on June 6, 2025 and sell it today you would earn a total of 2,200 from holding American Express or generate 7.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. Emerging Markets Equity
Performance |
| Timeline |
| American Express |
| Emerging Markets Equity |
American Express and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Emerging Markets
The main advantage of trading using opposite American Express and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.| American Express vs. Mastercard | American Express vs. Visa Class A | American Express vs. PayPal Holdings | American Express vs. The Bank of |
| Emerging Markets vs. Franklin Adjustable Government | Emerging Markets vs. Prudential California Muni | Emerging Markets vs. Ab Municipal Bond | Emerging Markets vs. Ab Municipal Bond |
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 the Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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