Correlation Between Johnson Johnson and GENERAL
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By analyzing existing cross correlation between Johnson Johnson and GENERAL ELEC CAP, you can compare the effects of market volatilities on Johnson Johnson and GENERAL 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 GENERAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johnson Johnson and GENERAL.
Diversification Opportunities for Johnson Johnson and GENERAL
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Johnson and GENERAL is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Johnson and GENERAL ELEC CAP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GENERAL ELEC CAP 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 GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GENERAL ELEC CAP has no effect on the direction of Johnson Johnson i.e., Johnson Johnson and GENERAL go up and down completely randomly.
Pair Corralation between Johnson Johnson and GENERAL
Considering the 90-day investment horizon Johnson Johnson is expected to generate 0.79 times more return on investment than GENERAL. However, Johnson Johnson is 1.26 times less risky than GENERAL. It trades about -0.36 of its potential returns per unit of risk. GENERAL ELEC CAP is currently generating about -0.56 per unit of risk. If you would invest 16,586 in Johnson Johnson on August 24, 2024 and sell it today you would lose (1,160) from holding Johnson Johnson or give up 6.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 21.74% |
| Values | Daily Returns |
Johnson Johnson vs. GENERAL ELEC CAP
Performance |
| Timeline |
| Johnson Johnson |
| GENERAL ELEC CAP |
Johnson Johnson and GENERAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johnson Johnson and GENERAL
The main advantage of trading using opposite Johnson Johnson and GENERAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johnson Johnson position performs unexpectedly, GENERAL 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 GENERAL will offset losses from the drop in GENERAL's long position.| Johnson Johnson vs. Merck Company | Johnson Johnson vs. Pfizer Inc | Johnson Johnson vs. Eshallgo Class A | Johnson Johnson vs. Amtech Systems |
| GENERAL vs. NioCorp Developments Ltd | GENERAL vs. Udemy Inc | GENERAL vs. Summa Silver Corp | GENERAL vs. Bright Scholar Education |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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