Correlation Between Johnson Johnson and Cresud SA
Can any of the company-specific risk be diversified away by investing in both Johnson Johnson and Cresud SA 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 Johnson and Cresud SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Johnson Johnson Co and Cresud SA, you can compare the effects of market volatilities on Johnson Johnson and Cresud SA 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 Johnson with a short position of Cresud SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johnson Johnson and Cresud SA.
Diversification Opportunities for Johnson Johnson and Cresud SA
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Johnson and Cresud is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Johnson Co and Cresud SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cresud SA and Johnson Johnson 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 Johnson Co are associated (or correlated) with Cresud SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cresud SA has no effect on the direction of Johnson Johnson i.e., Johnson Johnson and Cresud SA go up and down completely randomly.
Pair Corralation between Johnson Johnson and Cresud SA
Assuming the 90 days trading horizon Johnson Johnson Co is expected to generate 0.39 times more return on investment than Cresud SA. However, Johnson Johnson Co is 2.58 times less risky than Cresud SA. It trades about 0.24 of its potential returns per unit of risk. Cresud SA is currently generating about -0.01 per unit of risk. If you would invest 1,107,500 in Johnson Johnson Co on October 20, 2024 and sell it today you would earn a total of 55,000 from holding Johnson Johnson Co or generate 4.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Johnson Johnson Co vs. Cresud SA
Performance |
| Timeline |
| Johnson Johnson |
| Cresud SA |
Johnson Johnson and Cresud SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johnson Johnson and Cresud SA
The main advantage of trading using opposite Johnson Johnson and Cresud SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johnson Johnson position performs unexpectedly, Cresud SA 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 Cresud SA will offset losses from the drop in Cresud SA's long position.| Johnson Johnson vs. Merck Company | Johnson Johnson vs. Pfizer Inc | Johnson Johnson vs. Walmart | Johnson Johnson vs. American Express Co |
| Cresud SA vs. Molinos Agro SA | Cresud SA vs. San Miguel AG | Cresud SA vs. Ledesma SAAI | Cresud SA vs. Inversora Juramento SA |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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