Correlation Between Johnson Johnson and Gentera SAB
Can any of the company-specific risk be diversified away by investing in both Johnson Johnson and Gentera SAB 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 Gentera SAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Johnson Johnson and Gentera SAB de, you can compare the effects of market volatilities on Johnson Johnson and Gentera SAB 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 Gentera SAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johnson Johnson and Gentera SAB.
Diversification Opportunities for Johnson Johnson and Gentera SAB
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Johnson and Gentera is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Johnson and Gentera SAB de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentera SAB de 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 Gentera SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentera SAB de has no effect on the direction of Johnson Johnson i.e., Johnson Johnson and Gentera SAB go up and down completely randomly.
Pair Corralation between Johnson Johnson and Gentera SAB
Considering the 90-day investment horizon Johnson Johnson is expected to under-perform the Gentera SAB. But the stock apears to be less risky and, when comparing its historical volatility, Johnson Johnson is 3.88 times less risky than Gentera SAB. The stock trades about -0.21 of its potential returns per unit of risk. The Gentera SAB de is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 119.00 in Gentera SAB de on August 26, 2024 and sell it today you would earn a total of 17.00 from holding Gentera SAB de or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Johnson Johnson vs. Gentera SAB de
Performance |
| Timeline |
| Johnson Johnson |
| Gentera SAB de |
Johnson Johnson and Gentera SAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johnson Johnson and Gentera SAB
The main advantage of trading using opposite Johnson Johnson and Gentera SAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johnson Johnson position performs unexpectedly, Gentera SAB 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 Gentera SAB will offset losses from the drop in Gentera SAB's long position.| Johnson Johnson vs. Capricor Therapeutics | Johnson Johnson vs. Akari Therapeutics PLC | Johnson Johnson vs. Soleno Therapeutics | Johnson Johnson vs. Bio Path Holdings |
| Gentera SAB vs. Copa Holdings SA | Gentera SAB vs. United Airlines Holdings | Gentera SAB vs. Delta Air Lines | Gentera SAB 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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