Correlation Between Johnson Health and Bonny Worldwide
Can any of the company-specific risk be diversified away by investing in both Johnson Health and Bonny Worldwide 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 Johnson Health and Bonny Worldwide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Johnson Health Tech and Bonny Worldwide, you can compare the effects of market volatilities on Johnson Health and Bonny Worldwide 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 Johnson Health with a short position of Bonny Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johnson Health and Bonny Worldwide.
Diversification Opportunities for Johnson Health and Bonny Worldwide
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Johnson and Bonny is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Health Tech and Bonny Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonny Worldwide and Johnson Health 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 Johnson Health Tech are associated (or correlated) with Bonny Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonny Worldwide has no effect on the direction of Johnson Health i.e., Johnson Health and Bonny Worldwide go up and down completely randomly.
Pair Corralation between Johnson Health and Bonny Worldwide
Assuming the 90 days trading horizon Johnson Health is expected to generate 1.83 times less return on investment than Bonny Worldwide. But when comparing it to its historical volatility, Johnson Health Tech is 1.46 times less risky than Bonny Worldwide. It trades about 0.1 of its potential returns per unit of risk. Bonny Worldwide is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 8,940 in Bonny Worldwide on August 29, 2024 and sell it today you would earn a total of 19,360 from holding Bonny Worldwide or generate 216.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Johnson Health Tech vs. Bonny Worldwide
Performance |
| Timeline |
| Johnson Health Tech |
| Bonny Worldwide |
Johnson Health and Bonny Worldwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johnson Health and Bonny Worldwide
The main advantage of trading using opposite Johnson Health and Bonny Worldwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johnson Health position performs unexpectedly, Bonny Worldwide 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 Bonny Worldwide will offset losses from the drop in Bonny Worldwide's long position.| Johnson Health vs. Yulon Finance Corp | Johnson Health vs. Taiwan Secom Co | Johnson Health vs. Pou Chen Corp | Johnson Health vs. Great Wall Enterprise |
| Bonny Worldwide vs. Feng Tay Enterprises | Bonny Worldwide vs. Ruentex Materials Co | Bonny Worldwide vs. Symtek Automation Asia | Bonny Worldwide vs. CTCI Corp |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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