Correlation Between CTCI Corp and Johnson Health
Can any of the company-specific risk be diversified away by investing in both CTCI Corp 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 CTCI Corp and Johnson Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTCI Corp and Johnson Health Tech, you can compare the effects of market volatilities on CTCI Corp 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 CTCI Corp with a short position of Johnson Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTCI Corp and Johnson Health.
Diversification Opportunities for CTCI Corp and Johnson Health
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CTCI and Johnson is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding CTCI Corp 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 CTCI Corp 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 CTCI Corp 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 CTCI Corp i.e., CTCI Corp and Johnson Health go up and down completely randomly.
Pair Corralation between CTCI Corp and Johnson Health
Assuming the 90 days trading horizon CTCI Corp is expected to under-perform the Johnson Health. But the stock apears to be less risky and, when comparing its historical volatility, CTCI Corp is 4.1 times less risky than Johnson Health. The stock trades about -0.02 of its potential returns per unit of risk. The Johnson Health Tech is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 19,200 in Johnson Health Tech on October 25, 2024 and sell it today you would lose (250.00) from holding Johnson Health Tech or give up 1.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTCI Corp vs. Johnson Health Tech
Performance |
| Timeline |
| CTCI Corp |
| Johnson Health Tech |
CTCI Corp and Johnson Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTCI Corp and Johnson Health
The main advantage of trading using opposite CTCI Corp and Johnson Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTCI Corp 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.| CTCI Corp vs. Taiwan Secom Co | CTCI Corp vs. Pou Chen Corp | CTCI Corp vs. Formosa Petrochemical Corp | CTCI Corp vs. Cheng Shin Rubber |
| Johnson Health vs. Taiwan Fertilizer Co | Johnson Health vs. Giant Manufacturing Co | Johnson Health vs. Grape King Bio | Johnson Health vs. Rexon Industrial 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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