Correlation Between Johnson Johnson and Marker Therapeutics
Can any of the company-specific risk be diversified away by investing in both Johnson Johnson and Marker Therapeutics 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 Marker Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Johnson Johnson and Marker Therapeutics, you can compare the effects of market volatilities on Johnson Johnson and Marker Therapeutics 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 Marker Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johnson Johnson and Marker Therapeutics.
Diversification Opportunities for Johnson Johnson and Marker Therapeutics
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Johnson and Marker is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Johnson and Marker Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marker Therapeutics 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 Marker Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marker Therapeutics has no effect on the direction of Johnson Johnson i.e., Johnson Johnson and Marker Therapeutics go up and down completely randomly.
Pair Corralation between Johnson Johnson and Marker Therapeutics
Considering the 90-day investment horizon Johnson Johnson is expected to under-perform the Marker Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Johnson Johnson is 8.97 times less risky than Marker Therapeutics. The stock trades about -0.2 of its potential returns per unit of risk. The Marker Therapeutics is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 364.00 in Marker Therapeutics on September 14, 2024 and sell it today you would earn a total of 108.00 from holding Marker Therapeutics or generate 29.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Johnson Johnson vs. Marker Therapeutics
Performance |
| Timeline |
| Johnson Johnson |
| Marker Therapeutics |
Johnson Johnson and Marker Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johnson Johnson and Marker Therapeutics
The main advantage of trading using opposite Johnson Johnson and Marker Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johnson Johnson position performs unexpectedly, Marker Therapeutics 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 Marker Therapeutics will offset losses from the drop in Marker Therapeutics' long position.| Johnson Johnson vs. Emergent Biosolutions | Johnson Johnson vs. Bausch Health Companies | Johnson Johnson vs. Neurocrine Biosciences | Johnson Johnson vs. Teva Pharma Industries |
| Marker Therapeutics vs. Lumos Pharma | Marker Therapeutics vs. Exicure | Marker Therapeutics vs. Protagenic Therapeutics | Marker Therapeutics vs. Pmv Pharmaceuticals |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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