Correlation Between Johnson Johnson and Sofina Société
Can any of the company-specific risk be diversified away by investing in both Johnson Johnson and Sofina Société 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 Sofina Société into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Johnson Johnson and Sofina Socit Anonyme, you can compare the effects of market volatilities on Johnson Johnson and Sofina Société 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 Sofina Société. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johnson Johnson and Sofina Société.
Diversification Opportunities for Johnson Johnson and Sofina Société
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Johnson and Sofina is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Johnson and Sofina Socit Anonyme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sofina Socit Anonyme 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 Sofina Société. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sofina Socit Anonyme has no effect on the direction of Johnson Johnson i.e., Johnson Johnson and Sofina Société go up and down completely randomly.
Pair Corralation between Johnson Johnson and Sofina Société
Considering the 90-day investment horizon Johnson Johnson is expected to under-perform the Sofina Société. In addition to that, Johnson Johnson is 7.54 times more volatile than Sofina Socit Anonyme. It trades about -0.14 of its total potential returns per unit of risk. Sofina Socit Anonyme is currently generating about -0.22 per unit of volatility. If you would invest 23,000 in Sofina Socit Anonyme on September 2, 2024 and sell it today you would lose (110.00) from holding Sofina Socit Anonyme or give up 0.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Johnson Johnson vs. Sofina Socit Anonyme
Performance |
| Timeline |
| Johnson Johnson |
| Sofina Socit Anonyme |
Johnson Johnson and Sofina Société Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johnson Johnson and Sofina Société
The main advantage of trading using opposite Johnson Johnson and Sofina Société positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johnson Johnson position performs unexpectedly, Sofina Société 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 Sofina Société will offset losses from the drop in Sofina Société's long position.| Johnson Johnson vs. Crinetics Pharmaceuticals | Johnson Johnson vs. Enanta Pharmaceuticals | Johnson Johnson vs. Amicus Therapeutics | Johnson Johnson vs. Connect Biopharma Holdings |
| Sofina Société vs. Marygold Companies | Sofina Société vs. Carbon Streaming Corp | Sofina Société vs. Arrowmark Financial Corp | Sofina Société vs. Patria Investments |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |