Correlation Between American Express and Joann
Can any of the company-specific risk be diversified away by investing in both American Express and Joann 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 Joann into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Joann Inc, you can compare the effects of market volatilities on American Express and Joann 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 Joann. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Joann.
Diversification Opportunities for American Express and Joann
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Joann is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Joann Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Joann Inc 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 Joann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Joann Inc has no effect on the direction of American Express i.e., American Express and Joann go up and down completely randomly.
Pair Corralation between American Express and Joann
Considering the 90-day investment horizon American Express is expected to generate 0.27 times more return on investment than Joann. However, American Express is 3.77 times less risky than Joann. It trades about 0.11 of its potential returns per unit of risk. Joann Inc is currently generating about -0.06 per unit of risk. If you would invest 14,023 in American Express on September 18, 2024 and sell it today you would earn a total of 16,334 from holding American Express or generate 116.48% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 28.89% |
Values | Daily Returns |
American Express vs. Joann Inc
Performance |
Timeline |
American Express |
Joann Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Express and Joann Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Express and Joann
The main advantage of trading using opposite American Express and Joann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Joann 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 Joann will offset losses from the drop in Joann's long position.American Express vs. Visa Class A | American Express vs. PayPal Holdings | American Express vs. Upstart Holdings | American Express vs. Mastercard |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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