Correlation Between Neo Performance and Johnson Matthey
Can any of the company-specific risk be diversified away by investing in both Neo Performance and Johnson Matthey 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 Neo Performance and Johnson Matthey into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neo Performance Materials and Johnson Matthey Plc, you can compare the effects of market volatilities on Neo Performance and Johnson Matthey 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 Neo Performance with a short position of Johnson Matthey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neo Performance and Johnson Matthey.
Diversification Opportunities for Neo Performance and Johnson Matthey
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Neo and Johnson is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Neo Performance Materials and Johnson Matthey Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johnson Matthey Plc and Neo Performance 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 Neo Performance Materials are associated (or correlated) with Johnson Matthey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johnson Matthey Plc has no effect on the direction of Neo Performance i.e., Neo Performance and Johnson Matthey go up and down completely randomly.
Pair Corralation between Neo Performance and Johnson Matthey
If you would invest 567.00 in Neo Performance Materials on August 31, 2024 and sell it today you would earn a total of 1.00 from holding Neo Performance Materials or generate 0.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Neo Performance Materials vs. Johnson Matthey Plc
Performance |
| Timeline |
| Neo Performance Materials |
| Johnson Matthey Plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Neo Performance and Johnson Matthey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neo Performance and Johnson Matthey
The main advantage of trading using opposite Neo Performance and Johnson Matthey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neo Performance position performs unexpectedly, Johnson Matthey 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 Johnson Matthey will offset losses from the drop in Johnson Matthey's long position.| Neo Performance vs. Sherwin Williams Co | Neo Performance vs. Air Liquide SA | Neo Performance vs. LAir Liquide SA | Neo Performance vs. Air Products and |
| Johnson Matthey vs. Neo Performance Materials | Johnson Matthey vs. Sensient Technologies | Johnson Matthey vs. Koppers Holdings | Johnson Matthey vs. Axalta Coating Systems |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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