Correlation Between Johnson Johnson and ProShares Trust
Can any of the company-specific risk be diversified away by investing in both Johnson Johnson and ProShares Trust 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 ProShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Johnson Johnson and ProShares Trust, you can compare the effects of market volatilities on Johnson Johnson and ProShares Trust 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 ProShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johnson Johnson and ProShares Trust.
Diversification Opportunities for Johnson Johnson and ProShares Trust
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Johnson and ProShares is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Johnson and ProShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Trust 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 ProShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Trust has no effect on the direction of Johnson Johnson i.e., Johnson Johnson and ProShares Trust go up and down completely randomly.
Pair Corralation between Johnson Johnson and ProShares Trust
Considering the 90-day investment horizon Johnson Johnson is expected to generate 150.8 times less return on investment than ProShares Trust. But when comparing it to its historical volatility, Johnson Johnson is 97.24 times less risky than ProShares Trust. It trades about 0.06 of its potential returns per unit of risk. ProShares Trust is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 0.00 in ProShares Trust on September 1, 2024 and sell it today you would earn a total of 2,709 from holding ProShares Trust or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
Johnson Johnson vs. ProShares Trust
Performance |
| Timeline |
| Johnson Johnson |
| ProShares Trust |
Johnson Johnson and ProShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johnson Johnson and ProShares Trust
The main advantage of trading using opposite Johnson Johnson and ProShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johnson Johnson position performs unexpectedly, ProShares Trust 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 ProShares Trust will offset losses from the drop in ProShares Trust's long position.| Johnson Johnson vs. Crinetics Pharmaceuticals | Johnson Johnson vs. Enanta Pharmaceuticals | Johnson Johnson vs. Amicus Therapeutics | Johnson Johnson vs. Connect Biopharma Holdings |
| ProShares Trust vs. Vanguard Total Stock | ProShares Trust vs. SPDR SP 500 | ProShares Trust vs. iShares Core SP | ProShares Trust vs. Vanguard Total Bond |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |