Correlation Between Johnson Johnson and MAIA Biotechnology
Can any of the company-specific risk be diversified away by investing in both Johnson Johnson and MAIA Biotechnology 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 MAIA Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Johnson Johnson and MAIA Biotechnology, you can compare the effects of market volatilities on Johnson Johnson and MAIA Biotechnology 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 MAIA Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johnson Johnson and MAIA Biotechnology.
Diversification Opportunities for Johnson Johnson and MAIA Biotechnology
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Johnson and MAIA is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Johnson and MAIA Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAIA Biotechnology 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 MAIA Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAIA Biotechnology has no effect on the direction of Johnson Johnson i.e., Johnson Johnson and MAIA Biotechnology go up and down completely randomly.
Pair Corralation between Johnson Johnson and MAIA Biotechnology
Considering the 90-day investment horizon Johnson Johnson is expected to generate 0.28 times more return on investment than MAIA Biotechnology. However, Johnson Johnson is 3.59 times less risky than MAIA Biotechnology. It trades about 0.19 of its potential returns per unit of risk. MAIA Biotechnology is currently generating about -0.13 per unit of risk. If you would invest 14,419 in Johnson Johnson on November 4, 2024 and sell it today you would earn a total of 796.00 from holding Johnson Johnson or generate 5.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Johnson Johnson vs. MAIA Biotechnology
Performance |
| Timeline |
| Johnson Johnson |
| MAIA Biotechnology |
Johnson Johnson and MAIA Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johnson Johnson and MAIA Biotechnology
The main advantage of trading using opposite Johnson Johnson and MAIA Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johnson Johnson position performs unexpectedly, MAIA Biotechnology 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 MAIA Biotechnology will offset losses from the drop in MAIA Biotechnology's long position.| Johnson Johnson vs. Merck Company | Johnson Johnson vs. Bristol Myers Squibb | Johnson Johnson vs. Amgen Inc | Johnson Johnson vs. Pfizer Inc |
| MAIA Biotechnology vs. Lineage Cell Therapeutics | MAIA Biotechnology vs. Armata Pharmaceuticals | MAIA Biotechnology vs. Portage Biotech | MAIA Biotechnology vs. Larimar Therapeutics |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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