Correlation Between Travelers Companies and Johnson Johnson
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Johnson Johnson 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 Travelers Companies and Johnson Johnson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Travelers Companies and Johnson Johnson, you can compare the effects of market volatilities on Travelers Companies and Johnson Johnson 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 Travelers Companies with a short position of Johnson Johnson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Johnson Johnson.
Diversification Opportunities for Travelers Companies and Johnson Johnson
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Travelers and Johnson is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Johnson Johnson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johnson Johnson and Travelers Companies 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 The Travelers Companies are associated (or correlated) with Johnson Johnson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johnson Johnson has no effect on the direction of Travelers Companies i.e., Travelers Companies and Johnson Johnson go up and down completely randomly.
Pair Corralation between Travelers Companies and Johnson Johnson
Considering the 90-day investment horizon The Travelers Companies is expected to generate 1.6 times more return on investment than Johnson Johnson. However, Travelers Companies is 1.6 times more volatile than Johnson Johnson. It trades about 0.13 of its potential returns per unit of risk. Johnson Johnson is currently generating about -0.21 per unit of risk. If you would invest 25,237 in The Travelers Companies on August 28, 2024 and sell it today you would earn a total of 885.00 from holding The Travelers Companies or generate 3.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Travelers Companies vs. Johnson Johnson
Performance |
| Timeline |
| The Travelers Companies |
| Johnson Johnson |
Travelers Companies and Johnson Johnson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Johnson Johnson
The main advantage of trading using opposite Travelers Companies and Johnson Johnson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Johnson Johnson 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 Johnson will offset losses from the drop in Johnson Johnson's long position.| Travelers Companies vs. Fiverr International | Travelers Companies vs. Pinterest | Travelers Companies vs. Upstart Holdings | Travelers Companies vs. Fastly Inc |
| Johnson Johnson vs. Capricor Therapeutics | Johnson Johnson vs. Soleno Therapeutics | Johnson Johnson vs. Bio Path Holdings | Johnson Johnson vs. Moleculin Biotech |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |