Correlation Between DAX Index and Johnson Johnson
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By analyzing existing cross correlation between DAX Index and Johnson Johnson, you can compare the effects of market volatilities on DAX Index and Johnson Johnson 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 DAX Index with a short position of Johnson Johnson. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Johnson Johnson.
Diversification Opportunities for DAX Index and Johnson Johnson
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between DAX and Johnson is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Johnson Johnson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johnson Johnson and DAX Index 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 DAX Index are associated (or correlated) with Johnson Johnson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johnson Johnson has no effect on the direction of DAX Index i.e., DAX Index and Johnson Johnson go up and down completely randomly.
Pair Corralation between DAX Index and Johnson Johnson
Assuming the 90 days trading horizon DAX Index is expected to generate 1.19 times less return on investment than Johnson Johnson. But when comparing it to its historical volatility, DAX Index is 1.15 times less risky than Johnson Johnson. It trades about 0.05 of its potential returns per unit of risk. Johnson Johnson is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 14,574 in Johnson Johnson on August 25, 2024 and sell it today you would earn a total of 296.00 from holding Johnson Johnson or generate 2.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Johnson Johnson
Performance |
| Timeline |
DAX Index and Johnson Johnson Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Johnson Johnson
Pair trading matchups for Johnson Johnson
Pair Trading with DAX Index and Johnson Johnson
The main advantage of trading using opposite DAX Index and Johnson Johnson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Johnson Johnson 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 Johnson will offset losses from the drop in Johnson Johnson's long position.| DAX Index vs. Granite Construction | DAX Index vs. AGRICULTBK HADR25 YC | DAX Index vs. ADRIATIC METALS LS 013355 | DAX Index vs. GREENX METALS LTD |
| Johnson Johnson vs. Merck Co | Johnson Johnson vs. Roche Holding Ltd | Johnson Johnson vs. Amgen Inc | Johnson Johnson vs. Bayer AG NA |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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