Correlation Between Onyx Healthcare and Johnson Health
Can any of the company-specific risk be diversified away by investing in both Onyx Healthcare and Johnson Health 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 Onyx Healthcare and Johnson Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Onyx Healthcare and Johnson Health Tech, you can compare the effects of market volatilities on Onyx Healthcare and Johnson Health 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 Onyx Healthcare with a short position of Johnson Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Onyx Healthcare and Johnson Health.
Diversification Opportunities for Onyx Healthcare and Johnson Health
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Onyx and Johnson is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Onyx Healthcare and Johnson Health Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johnson Health Tech and Onyx Healthcare 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 Onyx Healthcare are associated (or correlated) with Johnson Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johnson Health Tech has no effect on the direction of Onyx Healthcare i.e., Onyx Healthcare and Johnson Health go up and down completely randomly.
Pair Corralation between Onyx Healthcare and Johnson Health
Assuming the 90 days trading horizon Onyx Healthcare is expected to generate 19.41 times more return on investment than Johnson Health. However, Onyx Healthcare is 19.41 times more volatile than Johnson Health Tech. It trades about 0.05 of its potential returns per unit of risk. Johnson Health Tech is currently generating about 0.1 per unit of risk. If you would invest 11,115 in Onyx Healthcare on September 2, 2024 and sell it today you would earn a total of 4,585 from holding Onyx Healthcare or generate 41.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Onyx Healthcare vs. Johnson Health Tech
Performance |
| Timeline |
| Onyx Healthcare |
| Johnson Health Tech |
Onyx Healthcare and Johnson Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Onyx Healthcare and Johnson Health
The main advantage of trading using opposite Onyx Healthcare and Johnson Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Onyx Healthcare position performs unexpectedly, Johnson Health 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 Health will offset losses from the drop in Johnson Health's long position.| Onyx Healthcare vs. YuantaP shares Taiwan Top | Onyx Healthcare vs. YuantaP shares Taiwan Mid Cap | Onyx Healthcare vs. Fubon MSCI Taiwan | Onyx Healthcare vs. YuantaP shares Taiwan Electronics |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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