Correlation Between Progate and Johnson Chemical
Can any of the company-specific risk be diversified away by investing in both Progate and Johnson Chemical 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 Progate and Johnson Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Progate Group and Johnson Chemical Pharmaceutical, you can compare the effects of market volatilities on Progate and Johnson Chemical 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 Progate with a short position of Johnson Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Progate and Johnson Chemical.
Diversification Opportunities for Progate and Johnson Chemical
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Progate and Johnson is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Progate Group and Johnson Chemical Pharmaceutica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johnson Chemical Pha and Progate 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 Progate Group are associated (or correlated) with Johnson Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johnson Chemical Pha has no effect on the direction of Progate i.e., Progate and Johnson Chemical go up and down completely randomly.
Pair Corralation between Progate and Johnson Chemical
Assuming the 90 days trading horizon Progate Group is expected to generate 1.42 times more return on investment than Johnson Chemical. However, Progate is 1.42 times more volatile than Johnson Chemical Pharmaceutical. It trades about 0.05 of its potential returns per unit of risk. Johnson Chemical Pharmaceutical is currently generating about 0.05 per unit of risk. If you would invest 10,169 in Progate Group on September 12, 2024 and sell it today you would earn a total of 7,431 from holding Progate Group or generate 73.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Progate Group vs. Johnson Chemical Pharmaceutica
Performance |
| Timeline |
| Progate Group |
| Johnson Chemical Pha |
Progate and Johnson Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Progate and Johnson Chemical
The main advantage of trading using opposite Progate and Johnson Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Progate position performs unexpectedly, Johnson Chemical 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 Chemical will offset losses from the drop in Johnson Chemical's long position.| Progate vs. Taiwan Semiconductor Manufacturing | Progate vs. Hon Hai Precision | Progate vs. MediaTek | Progate vs. Chunghwa Telecom Co |
| Johnson Chemical vs. Apex Biotechnology Corp | Johnson Chemical vs. Ruentex Development Co | Johnson Chemical vs. WiseChip Semiconductor | Johnson Chemical vs. Novatek Microelectronics 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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