Correlation Between Johnson Johnson and Lyons Bancorp
Can any of the company-specific risk be diversified away by investing in both Johnson Johnson and Lyons Bancorp 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 Lyons Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Johnson Johnson and Lyons Bancorp, you can compare the effects of market volatilities on Johnson Johnson and Lyons Bancorp 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 Lyons Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johnson Johnson and Lyons Bancorp.
Diversification Opportunities for Johnson Johnson and Lyons Bancorp
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Johnson and Lyons is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Johnson and Lyons Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyons Bancorp 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 Lyons Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyons Bancorp has no effect on the direction of Johnson Johnson i.e., Johnson Johnson and Lyons Bancorp go up and down completely randomly.
Pair Corralation between Johnson Johnson and Lyons Bancorp
Considering the 90-day investment horizon Johnson Johnson is expected to generate 0.68 times more return on investment than Lyons Bancorp. However, Johnson Johnson is 1.48 times less risky than Lyons Bancorp. It trades about 0.01 of its potential returns per unit of risk. Lyons Bancorp is currently generating about 0.0 per unit of risk. If you would invest 15,315 in Johnson Johnson on August 25, 2024 and sell it today you would earn a total of 202.00 from holding Johnson Johnson or generate 1.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 91.27% |
| Values | Daily Returns |
Johnson Johnson vs. Lyons Bancorp
Performance |
| Timeline |
| Johnson Johnson |
| Lyons Bancorp |
Johnson Johnson and Lyons Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johnson Johnson and Lyons Bancorp
The main advantage of trading using opposite Johnson Johnson and Lyons Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johnson Johnson position performs unexpectedly, Lyons Bancorp 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 Lyons Bancorp will offset losses from the drop in Lyons Bancorp'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 |
| Lyons Bancorp vs. FS Bancorp | Lyons Bancorp vs. Eastern Michigan Financial | Lyons Bancorp vs. Grand River Commerce | Lyons Bancorp vs. Bank of Botetourt |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |