Correlation Between Johnson Health and Concord Securities

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Can any of the company-specific risk be diversified away by investing in both Johnson Health and Concord Securities 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 Health and Concord Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Johnson Health Tech and Concord Securities Co, you can compare the effects of market volatilities on Johnson Health and Concord Securities 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 Health with a short position of Concord Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johnson Health and Concord Securities.

Diversification Opportunities for Johnson Health and Concord Securities

JohnsonConcordDiversified AwayJohnsonConcordDiversified Away100%
-0.34
  Correlation Coefficient

Very good diversification

The 3 months correlation between Johnson and Concord is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Health Tech and Concord Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concord Securities and Johnson Health 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 Health Tech are associated (or correlated) with Concord Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concord Securities has no effect on the direction of Johnson Health i.e., Johnson Health and Concord Securities go up and down completely randomly.

Pair Corralation between Johnson Health and Concord Securities

Assuming the 90 days trading horizon Johnson Health Tech is expected to generate 4.0 times more return on investment than Concord Securities. However, Johnson Health is 4.0 times more volatile than Concord Securities Co. It trades about 0.05 of its potential returns per unit of risk. Concord Securities Co is currently generating about 0.14 per unit of risk. If you would invest  15,600  in Johnson Health Tech on November 23, 2024 and sell it today you would earn a total of  900.00  from holding Johnson Health Tech or generate 5.77% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Johnson Health Tech  vs.  Concord Securities Co

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-50510152025
JavaScript chart by amCharts 3.21.151736 6016
       Timeline  
Johnson Health Tech 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Johnson Health Tech are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Johnson Health may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb150160170180190200
Concord Securities 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Concord Securities Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Concord Securities may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb13.51414.515

Johnson Health and Concord Securities Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-11.44-8.57-5.7-2.820.04792.845.788.7211.6614.6 0.10.20.30.40.5
JavaScript chart by amCharts 3.21.151736 6016
       Returns  

Pair Trading with Johnson Health and Concord Securities

The main advantage of trading using opposite Johnson Health and Concord Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johnson Health position performs unexpectedly, Concord Securities 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 Concord Securities will offset losses from the drop in Concord Securities' long position.
The idea behind Johnson Health Tech and Concord Securities Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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