Correlation Between BAIDU and Johnson Johnson
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By analyzing existing cross correlation between BAIDU INC 3625 and Johnson Johnson, you can compare the effects of market volatilities on BAIDU 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 BAIDU with a short position of Johnson Johnson. Check out your portfolio center. Please also check ongoing floating volatility patterns of BAIDU and Johnson Johnson.
Diversification Opportunities for BAIDU and Johnson Johnson
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BAIDU and Johnson is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding BAIDU INC 3625 and Johnson Johnson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johnson Johnson and BAIDU 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 BAIDU INC 3625 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 BAIDU i.e., BAIDU and Johnson Johnson go up and down completely randomly.
Pair Corralation between BAIDU and Johnson Johnson
Assuming the 90 days trading horizon BAIDU is expected to generate 23.27 times less return on investment than Johnson Johnson. But when comparing it to its historical volatility, BAIDU INC 3625 is 9.97 times less risky than Johnson Johnson. It trades about 0.14 of its potential returns per unit of risk. Johnson Johnson is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 15,168 in Johnson Johnson on November 28, 2024 and sell it today you would earn a total of 1,140 from holding Johnson Johnson or generate 7.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 22.73% |
| Values | Daily Returns |
BAIDU INC 3625 vs. Johnson Johnson
Performance |
| Timeline |
| BAIDU INC 3625 |
| Johnson Johnson |
BAIDU and Johnson Johnson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BAIDU and Johnson Johnson
The main advantage of trading using opposite BAIDU and Johnson Johnson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BAIDU 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.| BAIDU vs. Micron Technology | BAIDU vs. Vishay Intertechnology | BAIDU vs. Glorywin Entertainment Group | BAIDU vs. Elmos Semiconductor SE |
| Johnson Johnson vs. Merck Company | Johnson Johnson vs. Bristol Myers Squibb | Johnson Johnson vs. Amgen Inc | Johnson Johnson vs. Pfizer Inc |
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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