Correlation Between Johnson Johnson and Alimera Sciences
Can any of the company-specific risk be diversified away by investing in both Johnson Johnson and Alimera Sciences 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 Alimera Sciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Johnson Johnson and Alimera Sciences, you can compare the effects of market volatilities on Johnson Johnson and Alimera Sciences 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 Alimera Sciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johnson Johnson and Alimera Sciences.
Diversification Opportunities for Johnson Johnson and Alimera Sciences
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Johnson and Alimera is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Johnson and Alimera Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alimera Sciences 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 Alimera Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alimera Sciences has no effect on the direction of Johnson Johnson i.e., Johnson Johnson and Alimera Sciences go up and down completely randomly.
Pair Corralation between Johnson Johnson and Alimera Sciences
If you would invest 554.00 in Alimera Sciences on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Alimera Sciences or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Johnson Johnson vs. Alimera Sciences
Performance |
| Timeline |
| Johnson Johnson |
| Alimera Sciences |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Johnson Johnson and Alimera Sciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johnson Johnson and Alimera Sciences
The main advantage of trading using opposite Johnson Johnson and Alimera Sciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johnson Johnson position performs unexpectedly, Alimera Sciences 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 Alimera Sciences will offset losses from the drop in Alimera Sciences' long position.| Johnson Johnson vs. Crinetics Pharmaceuticals | Johnson Johnson vs. Enanta Pharmaceuticals | Johnson Johnson vs. Amicus Therapeutics | Johnson Johnson vs. Connect Biopharma Holdings |
| Alimera Sciences vs. Shuttle Pharmaceuticals | Alimera Sciences vs. Lifecore Biomedical | Alimera Sciences vs. Journey Medical Corp | Alimera Sciences vs. Organogenesis Holdings |
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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