Correlation Between Johnson Johnson and Xencor
Can any of the company-specific risk be diversified away by investing in both Johnson Johnson and Xencor 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 Xencor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Johnson Johnson and Xencor Inc, you can compare the effects of market volatilities on Johnson Johnson and Xencor 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 Xencor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johnson Johnson and Xencor.
Diversification Opportunities for Johnson Johnson and Xencor
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Johnson and Xencor is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Johnson and Xencor Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xencor Inc 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 Xencor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xencor Inc has no effect on the direction of Johnson Johnson i.e., Johnson Johnson and Xencor go up and down completely randomly.
Pair Corralation between Johnson Johnson and Xencor
Considering the 90-day investment horizon Johnson Johnson is expected to under-perform the Xencor. But the stock apears to be less risky and, when comparing its historical volatility, Johnson Johnson is 2.99 times less risky than Xencor. The stock trades about -0.01 of its potential returns per unit of risk. The Xencor Inc is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 2,951 in Xencor Inc on August 25, 2024 and sell it today you would lose (450.00) from holding Xencor Inc or give up 15.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Johnson Johnson vs. Xencor Inc
Performance |
| Timeline |
| Johnson Johnson |
| Xencor Inc |
Johnson Johnson and Xencor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johnson Johnson and Xencor
The main advantage of trading using opposite Johnson Johnson and Xencor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johnson Johnson position performs unexpectedly, Xencor 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 Xencor will offset losses from the drop in Xencor's long position.| Johnson Johnson vs. Capricor Therapeutics | Johnson Johnson vs. Akari Therapeutics PLC | Johnson Johnson vs. Soleno Therapeutics | Johnson Johnson vs. Bio Path Holdings |
| Xencor vs. Edgewise Therapeutics | Xencor vs. Keros Therapeutics | Xencor vs. Monte Rosa Therapeutics | Xencor vs. Mineralys Therapeutics, Common |
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 Managers module to screen money managers from public funds and ETFs managed around the world.
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