Correlation Between Johnson Johnson and American Equity
Can any of the company-specific risk be diversified away by investing in both Johnson Johnson and American Equity 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 American Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Johnson Johnson and American Equity Investment, you can compare the effects of market volatilities on Johnson Johnson and American Equity 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 American Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johnson Johnson and American Equity.
Diversification Opportunities for Johnson Johnson and American Equity
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Johnson and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Johnson and American Equity Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Equity Inve 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 are associated (or correlated) with American Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Equity Inve has no effect on the direction of Johnson Johnson i.e., Johnson Johnson and American Equity go up and down completely randomly.
Pair Corralation between Johnson Johnson and American Equity
If you would invest 15,015 in Johnson Johnson on January 16, 2025 and sell it today you would earn a total of 317.00 from holding Johnson Johnson or generate 2.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Johnson Johnson vs. American Equity Investment
Performance |
| Timeline |
| Johnson Johnson |
| American Equity Inve |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Johnson Johnson and American Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johnson Johnson and American Equity
The main advantage of trading using opposite Johnson Johnson and American Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johnson Johnson position performs unexpectedly, American Equity 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 American Equity will offset losses from the drop in American Equity's long position.| Johnson Johnson vs. Ameritrans Capital Corp | Johnson Johnson vs. MicroAlgo | Johnson Johnson vs. Summa Silver Corp | Johnson Johnson vs. Invesco California Value |
| American Equity vs. MetLife Preferred Stock | American Equity vs. Prudential PLC ADR | American Equity vs. MetLife Preferred Stock | American Equity vs. Jackson Financial |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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