Correlation Between Johnson Johnson and Niagara Mohawk
Can any of the company-specific risk be diversified away by investing in both Johnson Johnson and Niagara Mohawk 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 Niagara Mohawk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Johnson Johnson and Niagara Mohawk Power, you can compare the effects of market volatilities on Johnson Johnson and Niagara Mohawk 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 Niagara Mohawk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johnson Johnson and Niagara Mohawk.
Diversification Opportunities for Johnson Johnson and Niagara Mohawk
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Johnson and Niagara is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Johnson and Niagara Mohawk Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Niagara Mohawk Power 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 Niagara Mohawk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Niagara Mohawk Power has no effect on the direction of Johnson Johnson i.e., Johnson Johnson and Niagara Mohawk go up and down completely randomly.
Pair Corralation between Johnson Johnson and Niagara Mohawk
If you would invest 6,200 in Niagara Mohawk Power on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Niagara Mohawk Power or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Johnson Johnson vs. Niagara Mohawk Power
Performance |
| Timeline |
| Johnson Johnson |
| Niagara Mohawk Power |
Johnson Johnson and Niagara Mohawk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johnson Johnson and Niagara Mohawk
The main advantage of trading using opposite Johnson Johnson and Niagara Mohawk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johnson Johnson position performs unexpectedly, Niagara Mohawk 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 Niagara Mohawk will offset losses from the drop in Niagara Mohawk's long position.| Johnson Johnson vs. Merck Company | Johnson Johnson vs. Pharvaris BV | Johnson Johnson vs. Brinker International | Johnson Johnson vs. Alcoa Corp |
| Niagara Mohawk vs. Scholastic | Niagara Mohawk vs. CVR Partners LP | Niagara Mohawk vs. NL Industries | Niagara Mohawk vs. Avient Corp |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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