Correlation Between American Express and JP Morgan

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both American Express and JP Morgan 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 JP Morgan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and JP Morgan Chase, you can compare the effects of market volatilities on American Express and JP Morgan 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 JP Morgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and JP Morgan.

Diversification Opportunities for American Express and JP Morgan

0.85
  Correlation Coefficient

Very poor diversification

The 3 months correlation between American and JP Morgan is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding American Express and JP Morgan Chase in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JP Morgan Chase 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 JP Morgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JP Morgan Chase has no effect on the direction of American Express i.e., American Express and JP Morgan go up and down completely randomly.

Pair Corralation between American Express and JP Morgan

Considering the 90-day investment horizon American Express is expected to generate 1.28 times more return on investment than JP Morgan. However, American Express is 1.28 times more volatile than JP Morgan Chase. It trades about 0.01 of its potential returns per unit of risk. JP Morgan Chase is currently generating about -0.04 per unit of risk. If you would invest  16,707  in American Express on May 21, 2022 and sell it today you would lose (483.00)  from holding American Express or give up 2.89% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

American Express  vs.  JP Morgan Chase

 Performance (%) 
       Timeline  
American Express 
American Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in American Express are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, American Express is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the insiders.

American Price Channel

JP Morgan Chase 
JP Morgan Performance
0 of 100
Over the last 90 days JP Morgan Chase has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady basic indicators, JP Morgan is not utilizing all of its potentials. The recent stock price chaos, may contribute to medium-term losses for the stakeholders.

JP Morgan Price Channel

American Express and JP Morgan Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with American Express and JP Morgan

The main advantage of trading using opposite American Express and JP Morgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, JP Morgan 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 JP Morgan will offset losses from the drop in JP Morgan's long position.
The idea behind American Express and JP Morgan Chase pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

Other Complementary Tools

Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Bond Directory
Find actively traded corporate debentures issued by US companies
Go
Piotroski F Score
Get Piotroski F Score based on binary analysis strategy of nine different fundamentals
Go
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Go
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Go
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Go
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Go
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go