Correlation Between Johnson Johnson and Cano Health
Can any of the company-specific risk be diversified away by investing in both Johnson Johnson and Cano Health 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 Cano Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Johnson Johnson and Cano Health, you can compare the effects of market volatilities on Johnson Johnson and Cano Health 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 Cano Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johnson Johnson and Cano Health.
Diversification Opportunities for Johnson Johnson and Cano Health
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Johnson and Cano is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Johnson and Cano Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cano Health 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 Cano Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cano Health has no effect on the direction of Johnson Johnson i.e., Johnson Johnson and Cano Health go up and down completely randomly.
Pair Corralation between Johnson Johnson and Cano Health
Considering the 90-day investment horizon Johnson Johnson is expected to under-perform the Cano Health. But the stock apears to be less risky and, when comparing its historical volatility, Johnson Johnson is 8.03 times less risky than Cano Health. The stock trades about -0.01 of its potential returns per unit of risk. The Cano Health is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 209.00 in Cano Health on August 24, 2024 and sell it today you would lose (72.00) from holding Cano Health or give up 34.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 32.06% |
| Values | Daily Returns |
Johnson Johnson vs. Cano Health
Performance |
| Timeline |
| Johnson Johnson |
| Cano Health |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Johnson Johnson and Cano Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johnson Johnson and Cano Health
The main advantage of trading using opposite Johnson Johnson and Cano Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johnson Johnson position performs unexpectedly, Cano Health 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 Cano Health will offset losses from the drop in Cano Health's long position.| Johnson Johnson vs. Merck Company | Johnson Johnson vs. Pfizer Inc | Johnson Johnson vs. Eshallgo Class A | Johnson Johnson vs. Amtech Systems |
| Cano Health vs. Oncology Institute | Cano Health vs. Lifestance Health Group | Cano Health vs. agilon health | Cano Health vs. Pennant Group |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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