Correlation Between Johnson Johnson and 36164QNA2
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By analyzing existing cross correlation between Johnson Johnson and GE CAP INTL, you can compare the effects of market volatilities on Johnson Johnson and 36164QNA2 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 36164QNA2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johnson Johnson and 36164QNA2.
Diversification Opportunities for Johnson Johnson and 36164QNA2
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Johnson and 36164QNA2 is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Johnson and GE CAP INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GE CAP INTL 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 36164QNA2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GE CAP INTL has no effect on the direction of Johnson Johnson i.e., Johnson Johnson and 36164QNA2 go up and down completely randomly.
Pair Corralation between Johnson Johnson and 36164QNA2
Considering the 90-day investment horizon Johnson Johnson is expected to generate 1.28 times more return on investment than 36164QNA2. However, Johnson Johnson is 1.28 times more volatile than GE CAP INTL. It trades about 0.46 of its potential returns per unit of risk. GE CAP INTL is currently generating about 0.05 per unit of risk. If you would invest 15,094 in Johnson Johnson on December 2, 2024 and sell it today you would earn a total of 1,408 from holding Johnson Johnson or generate 9.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 76.19% |
| Values | Daily Returns |
Johnson Johnson vs. GE CAP INTL
Performance |
| Timeline |
| Johnson Johnson |
| GE CAP INTL |
Johnson Johnson and 36164QNA2 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johnson Johnson and 36164QNA2
The main advantage of trading using opposite Johnson Johnson and 36164QNA2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johnson Johnson position performs unexpectedly, 36164QNA2 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 36164QNA2 will offset losses from the drop in 36164QNA2's long position.| Johnson Johnson vs. Merck Company | ||
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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