Correlation Between Johnson Johnson and Ledesma SAAI
Can any of the company-specific risk be diversified away by investing in both Johnson Johnson and Ledesma SAAI 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 Ledesma SAAI 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 Ledesma SAAI, you can compare the effects of market volatilities on Johnson Johnson and Ledesma SAAI 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 Ledesma SAAI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johnson Johnson and Ledesma SAAI.
Diversification Opportunities for Johnson Johnson and Ledesma SAAI
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Johnson and Ledesma is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Johnson Co and Ledesma SAAI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ledesma SAAI 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 Ledesma SAAI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ledesma SAAI has no effect on the direction of Johnson Johnson i.e., Johnson Johnson and Ledesma SAAI go up and down completely randomly.
Pair Corralation between Johnson Johnson and Ledesma SAAI
Assuming the 90 days trading horizon Johnson Johnson Co is expected to generate 0.6 times more return on investment than Ledesma SAAI. However, Johnson Johnson Co is 1.66 times less risky than Ledesma SAAI. It trades about 0.24 of its potential returns per unit of risk. Ledesma SAAI is currently generating about -0.08 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 | 100.0% |
| Values | Daily Returns |
Johnson Johnson Co vs. Ledesma SAAI
Performance |
| Timeline |
| Johnson Johnson |
| Ledesma SAAI |
Johnson Johnson and Ledesma SAAI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johnson Johnson and Ledesma SAAI
The main advantage of trading using opposite Johnson Johnson and Ledesma SAAI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johnson Johnson position performs unexpectedly, Ledesma SAAI 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 Ledesma SAAI will offset losses from the drop in Ledesma SAAI's long position.| Johnson Johnson vs. Merck Company | Johnson Johnson vs. Pfizer Inc | Johnson Johnson vs. Walmart | Johnson Johnson vs. American Express Co |
| Ledesma SAAI vs. Molinos Agro SA | Ledesma SAAI vs. Cresud SA | Ledesma SAAI vs. San Miguel AG | Ledesma SAAI 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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