Correlation Between American Express and JOHNSON
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By analyzing existing cross correlation between American Express and JOHNSON JOHNSON 34, you can compare the effects of market volatilities on American Express and JOHNSON 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 JOHNSON. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and JOHNSON.
Diversification Opportunities for American Express and JOHNSON
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and JOHNSON is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding American Express and JOHNSON JOHNSON 34 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JOHNSON JOHNSON 34 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 JOHNSON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JOHNSON JOHNSON 34 has no effect on the direction of American Express i.e., American Express and JOHNSON go up and down completely randomly.
Pair Corralation between American Express and JOHNSON
Considering the 90-day investment horizon American Express is expected to generate 1.38 times more return on investment than JOHNSON. However, American Express is 1.38 times more volatile than JOHNSON JOHNSON 34. It trades about 0.16 of its potential returns per unit of risk. JOHNSON JOHNSON 34 is currently generating about 0.01 per unit of risk. If you would invest 16,370 in American Express on August 24, 2024 and sell it today you would earn a total of 12,930 from holding American Express or generate 78.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
American Express vs. JOHNSON JOHNSON 34
Performance |
| Timeline |
| American Express |
| JOHNSON JOHNSON 34 |
American Express and JOHNSON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and JOHNSON
The main advantage of trading using opposite American Express and JOHNSON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, JOHNSON 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 JOHNSON will offset losses from the drop in JOHNSON's long position.| American Express vs. Small Cap Core | American Express vs. Morningstar Unconstrained Allocation | American Express vs. Mutual Of America | American Express vs. Ep Emerging Markets |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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