Correlation Between Cizzle Biotechnology and Johnson Matthey

Can any of the company-specific risk be diversified away by investing in both Cizzle Biotechnology 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 Cizzle Biotechnology and Johnson Matthey into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cizzle Biotechnology Holdings and Johnson Matthey PLC, you can compare the effects of market volatilities on Cizzle Biotechnology 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 Cizzle Biotechnology with a short position of Johnson Matthey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cizzle Biotechnology and Johnson Matthey.

Diversification Opportunities for Cizzle Biotechnology and Johnson Matthey

0.49

Correlation Coefficient

Cizzle Biotechnology  Johnson Matthey

Very weak diversification

The 3 months correlation between Cizzle and Johnson is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Cizzle Biotechnology Holdings 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 Cizzle Biotechnology 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 Cizzle Biotechnology Holdings 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 Cizzle Biotechnology i.e., Cizzle Biotechnology and Johnson Matthey go up and down completely randomly.

Pair Corralation between Cizzle Biotechnology and Johnson Matthey

Assuming the 90 days trading horizon Cizzle Biotechnology Holdings is expected to under-perform the Johnson Matthey. In addition to that, Cizzle Biotechnology is 1.57 times more volatile than Johnson Matthey PLC. It trades about -0.11 of its total potential returns per unit of risk. Johnson Matthey PLC is currently generating about -0.1 per unit of volatility. If you would invest  152,179  in Johnson Matthey PLC on October 5, 2024 and sell it today you would lose (18,179) from holding Johnson Matthey PLC or give up 11.95% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Cizzle Biotechnology Holdings  vs.  Johnson Matthey PLC

Cizzle Biotechnology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cizzle Biotechnology Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Johnson Matthey PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Johnson Matthey PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Cizzle Biotechnology and Johnson Matthey

The main advantage of trading using opposite Cizzle Biotechnology and Johnson Matthey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cizzle Biotechnology 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.

The idea behind Cizzle Biotechnology Holdings and Johnson Matthey PLC 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.