Correlation Between Johnson Johnson and LOWES
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By analyzing existing cross correlation between Johnson Johnson and LOWES INC 425, you can compare the effects of market volatilities on Johnson Johnson and LOWES 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 LOWES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johnson Johnson and LOWES.
Diversification Opportunities for Johnson Johnson and LOWES
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Johnson and LOWES is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Johnson and LOWES INC 425 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOWES INC 425 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 LOWES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOWES INC 425 has no effect on the direction of Johnson Johnson i.e., Johnson Johnson and LOWES go up and down completely randomly.
Pair Corralation between Johnson Johnson and LOWES
Considering the 90-day investment horizon Johnson Johnson is expected to generate 0.48 times more return on investment than LOWES. However, Johnson Johnson is 2.06 times less risky than LOWES. It trades about 0.07 of its potential returns per unit of risk. LOWES INC 425 is currently generating about -0.11 per unit of risk. If you would invest 14,527 in Johnson Johnson on October 23, 2024 and sell it today you would earn a total of 176.00 from holding Johnson Johnson or generate 1.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 66.67% |
| Values | Daily Returns |
Johnson Johnson vs. LOWES INC 425
Performance |
| Timeline |
| Johnson Johnson |
| LOWES INC 425 |
Johnson Johnson and LOWES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johnson Johnson and LOWES
The main advantage of trading using opposite Johnson Johnson and LOWES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johnson Johnson position performs unexpectedly, LOWES 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 LOWES will offset losses from the drop in LOWES's long position.| Johnson Johnson vs. Merck Company | Johnson Johnson vs. Bristol Myers Squibb | Johnson Johnson vs. Amgen Inc | Johnson Johnson vs. Pfizer Inc |
| LOWES vs. Boston Beer | LOWES vs. United Fire Group | LOWES vs. Sun Life Financial | LOWES vs. Molina Healthcare |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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