Correlation Between Johnson Johnson and Bakkt Holdings
Can any of the company-specific risk be diversified away by investing in both Johnson Johnson and Bakkt Holdings 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 Bakkt Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Johnson Johnson and Bakkt Holdings Warrant, you can compare the effects of market volatilities on Johnson Johnson and Bakkt Holdings 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 Bakkt Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johnson Johnson and Bakkt Holdings.
Diversification Opportunities for Johnson Johnson and Bakkt Holdings
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Johnson and Bakkt is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Johnson and Bakkt Holdings Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bakkt Holdings Warrant 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 Bakkt Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bakkt Holdings Warrant has no effect on the direction of Johnson Johnson i.e., Johnson Johnson and Bakkt Holdings go up and down completely randomly.
Pair Corralation between Johnson Johnson and Bakkt Holdings
Considering the 90-day investment horizon Johnson Johnson is expected to under-perform the Bakkt Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Johnson Johnson is 82.71 times less risky than Bakkt Holdings. The stock trades about -0.21 of its potential returns per unit of risk. The Bakkt Holdings Warrant is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 9.00 in Bakkt Holdings Warrant on August 29, 2024 and sell it today you would earn a total of 32.00 from holding Bakkt Holdings Warrant or generate 355.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Johnson Johnson vs. Bakkt Holdings Warrant
Performance |
| Timeline |
| Johnson Johnson |
| Bakkt Holdings Warrant |
Johnson Johnson and Bakkt Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johnson Johnson and Bakkt Holdings
The main advantage of trading using opposite Johnson Johnson and Bakkt Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johnson Johnson position performs unexpectedly, Bakkt Holdings 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 Bakkt Holdings will offset losses from the drop in Bakkt Holdings' long position.| Johnson Johnson vs. Capricor Therapeutics | Johnson Johnson vs. Soleno Therapeutics | Johnson Johnson vs. Bio Path Holdings | Johnson Johnson vs. Moleculin Biotech |
| Bakkt Holdings vs. Copa Holdings SA | Bakkt Holdings vs. United Airlines Holdings | Bakkt Holdings vs. Delta Air Lines | Bakkt Holdings vs. SkyWest |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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