Correlation Between Johnson Johnson and First Keystone
Can any of the company-specific risk be diversified away by investing in both Johnson Johnson and First Keystone 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 First Keystone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Johnson Johnson and First Keystone Corp, you can compare the effects of market volatilities on Johnson Johnson and First Keystone 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 First Keystone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johnson Johnson and First Keystone.
Diversification Opportunities for Johnson Johnson and First Keystone
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Johnson and First is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Johnson and First Keystone Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Keystone Corp 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 First Keystone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Keystone Corp has no effect on the direction of Johnson Johnson i.e., Johnson Johnson and First Keystone go up and down completely randomly.
Pair Corralation between Johnson Johnson and First Keystone
Considering the 90-day investment horizon Johnson Johnson is expected to under-perform the First Keystone. But the stock apears to be less risky and, when comparing its historical volatility, Johnson Johnson is 6.04 times less risky than First Keystone. The stock trades about -0.13 of its potential returns per unit of risk. The First Keystone Corp is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 1,175 in First Keystone Corp on September 1, 2024 and sell it today you would earn a total of 477.00 from holding First Keystone Corp or generate 40.6% 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. First Keystone Corp
Performance |
| Timeline |
| Johnson Johnson |
| First Keystone Corp |
Johnson Johnson and First Keystone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johnson Johnson and First Keystone
The main advantage of trading using opposite Johnson Johnson and First Keystone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johnson Johnson position performs unexpectedly, First Keystone 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 First Keystone will offset losses from the drop in First Keystone's long position.| Johnson Johnson vs. Crinetics Pharmaceuticals | Johnson Johnson vs. Enanta Pharmaceuticals | Johnson Johnson vs. Amicus Therapeutics | Johnson Johnson vs. Connect Biopharma Holdings |
| First Keystone vs. HUMANA INC | First Keystone vs. SCOR PK | First Keystone vs. Aquagold International | First Keystone vs. Thrivent High Yield |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |