Correlation Between Johnson Johnson and SOUTHERN
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By analyzing existing cross correlation between Johnson Johnson and SOUTHERN CALIF EDISON, you can compare the effects of market volatilities on Johnson Johnson and SOUTHERN 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 SOUTHERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johnson Johnson and SOUTHERN.
Diversification Opportunities for Johnson Johnson and SOUTHERN
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Johnson and SOUTHERN is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Johnson and SOUTHERN CALIF EDISON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOUTHERN CALIF EDISON 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 SOUTHERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOUTHERN CALIF EDISON has no effect on the direction of Johnson Johnson i.e., Johnson Johnson and SOUTHERN go up and down completely randomly.
Pair Corralation between Johnson Johnson and SOUTHERN
Considering the 90-day investment horizon Johnson Johnson is expected to under-perform the SOUTHERN. But the stock apears to be less risky and, when comparing its historical volatility, Johnson Johnson is 53.19 times less risky than SOUTHERN. The stock trades about -0.02 of its potential returns per unit of risk. The SOUTHERN CALIF EDISON is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 8,624 in SOUTHERN CALIF EDISON on September 12, 2024 and sell it today you would earn a total of 340.00 from holding SOUTHERN CALIF EDISON or generate 3.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 73.33% |
| Values | Daily Returns |
Johnson Johnson vs. SOUTHERN CALIF EDISON
Performance |
| Timeline |
| Johnson Johnson |
| SOUTHERN CALIF EDISON |
Johnson Johnson and SOUTHERN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johnson Johnson and SOUTHERN
The main advantage of trading using opposite Johnson Johnson and SOUTHERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johnson Johnson position performs unexpectedly, SOUTHERN 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 SOUTHERN will offset losses from the drop in SOUTHERN's long position.| Johnson Johnson vs. Victory Integrity Smallmid Cap | Johnson Johnson vs. Hilton Worldwide Holdings | Johnson Johnson vs. NVIDIA | Johnson Johnson vs. JPMorgan Chase Co |
| SOUTHERN vs. LGI Homes | SOUTHERN vs. Algoma Steel Group | SOUTHERN vs. Insteel Industries | SOUTHERN vs. Lindblad Expeditions Holdings |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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