Correlation Between American Express and NORTHROP
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By analyzing existing cross correlation between American Express and NORTHROP GRUMMAN P, you can compare the effects of market volatilities on American Express and NORTHROP 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 NORTHROP. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and NORTHROP.
Diversification Opportunities for American Express and NORTHROP
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and NORTHROP is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding American Express and NORTHROP GRUMMAN P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORTHROP GRUMMAN P 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 NORTHROP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORTHROP GRUMMAN P has no effect on the direction of American Express i.e., American Express and NORTHROP go up and down completely randomly.
Pair Corralation between American Express and NORTHROP
Considering the 90-day investment horizon American Express is expected to generate 1.47 times more return on investment than NORTHROP. However, American Express is 1.47 times more volatile than NORTHROP GRUMMAN P. It trades about 0.25 of its potential returns per unit of risk. NORTHROP GRUMMAN P is currently generating about -0.14 per unit of risk. If you would invest 27,408 in American Express on August 31, 2024 and sell it today you would earn a total of 3,017 from holding American Express or generate 11.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
American Express vs. NORTHROP GRUMMAN P
Performance |
| Timeline |
| American Express |
| NORTHROP GRUMMAN P |
American Express and NORTHROP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and NORTHROP
The main advantage of trading using opposite American Express and NORTHROP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, NORTHROP 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 NORTHROP will offset losses from the drop in NORTHROP's long position.| American Express vs. Visa Class A | American Express vs. RLJ Lodging Trust | American Express vs. Aquagold International | American Express vs. Stepstone Group |
| NORTHROP vs. AEP TEX INC | NORTHROP vs. US BANK NATIONAL | NORTHROP vs. Bank of America | NORTHROP vs. GE Aerospace |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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