Correlation Between Strategic Asset and Johnson Opportunity
Can any of the company-specific risk be diversified away by investing in both Strategic Asset and Johnson Opportunity 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 Strategic Asset and Johnson Opportunity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Asset Management and Johnson Opportunity S, you can compare the effects of market volatilities on Strategic Asset and Johnson Opportunity 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 Strategic Asset with a short position of Johnson Opportunity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Asset and Johnson Opportunity.
Diversification Opportunities for Strategic Asset and Johnson Opportunity
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Strategic and Johnson is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Asset Management and Johnson Opportunity S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johnson Opportunity and Strategic Asset 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 Strategic Asset Management are associated (or correlated) with Johnson Opportunity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johnson Opportunity has no effect on the direction of Strategic Asset i.e., Strategic Asset and Johnson Opportunity go up and down completely randomly.
Pair Corralation between Strategic Asset and Johnson Opportunity
Assuming the 90 days horizon Strategic Asset Management is expected to generate 0.73 times more return on investment than Johnson Opportunity. However, Strategic Asset Management is 1.37 times less risky than Johnson Opportunity. It trades about -0.03 of its potential returns per unit of risk. Johnson Opportunity S is currently generating about -0.23 per unit of risk. If you would invest 1,878 in Strategic Asset Management on November 28, 2024 and sell it today you would lose (6.00) from holding Strategic Asset Management or give up 0.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Strategic Asset Management vs. Johnson Opportunity S
Performance |
| Timeline |
| Strategic Asset Mana |
| Johnson Opportunity |
Strategic Asset and Johnson Opportunity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Asset and Johnson Opportunity
The main advantage of trading using opposite Strategic Asset and Johnson Opportunity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Asset position performs unexpectedly, Johnson Opportunity 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 Opportunity will offset losses from the drop in Johnson Opportunity's long position.| Strategic Asset vs. Firsthand Technology Opportunities | Strategic Asset vs. Blackrock Science Technology | Strategic Asset vs. Virtus Artificial Intelligence | Strategic Asset vs. Baron Select Funds |
| Johnson Opportunity vs. Johnson Core Plus | Johnson Opportunity vs. Johnson Enhanced Return | Johnson Opportunity vs. Johnson Equity Income | Johnson Opportunity vs. Johnson Equity Income |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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