Correlation Between Johnson Johnson and Lig Assets
Can any of the company-specific risk be diversified away by investing in both Johnson Johnson and Lig Assets 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 Lig Assets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Johnson Johnson and Lig Assets, you can compare the effects of market volatilities on Johnson Johnson and Lig Assets 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 Lig Assets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johnson Johnson and Lig Assets.
Diversification Opportunities for Johnson Johnson and Lig Assets
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Johnson and Lig is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Johnson and Lig Assets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lig Assets 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 Lig Assets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lig Assets has no effect on the direction of Johnson Johnson i.e., Johnson Johnson and Lig Assets go up and down completely randomly.
Pair Corralation between Johnson Johnson and Lig Assets
Considering the 90-day investment horizon Johnson Johnson is expected to generate 17.74 times less return on investment than Lig Assets. But when comparing it to its historical volatility, Johnson Johnson is 11.7 times less risky than Lig Assets. It trades about 0.02 of its potential returns per unit of risk. Lig Assets is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2.75 in Lig Assets on September 2, 2024 and sell it today you would lose (1.47) from holding Lig Assets or give up 53.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.79% |
| Values | Daily Returns |
Johnson Johnson vs. Lig Assets
Performance |
| Timeline |
| Johnson Johnson |
| Lig Assets |
Johnson Johnson and Lig Assets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johnson Johnson and Lig Assets
The main advantage of trading using opposite Johnson Johnson and Lig Assets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johnson Johnson position performs unexpectedly, Lig Assets 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 Lig Assets will offset losses from the drop in Lig Assets' long position.| Johnson Johnson vs. Crinetics Pharmaceuticals | Johnson Johnson vs. Enanta Pharmaceuticals | Johnson Johnson vs. Amicus Therapeutics | Johnson Johnson vs. Connect Biopharma Holdings |
| Lig Assets vs. Beyond Commerce | Lig Assets vs. Baosheng Media Group | Lig Assets vs. MGO Global Common | Lig Assets vs. CMG Holdings 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |