Correlation Between Johnson Johnson and Aptorum Group

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

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

Diversification Opportunities for Johnson Johnson and Aptorum Group

0.26

Correlation Coefficient

Johnson Johnson  Aptorum Group

Modest diversification

The 3 months correlation between Johnson and Aptorum is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Johnson and Aptorum Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptorum Group and Johnson Johnson 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 Johnson are associated (or correlated) with Aptorum Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptorum Group has no effect on the direction of Johnson Johnson i.e., Johnson Johnson and Aptorum Group go up and down completely randomly.

Pair Corralation between Johnson Johnson and Aptorum Group

Considering the 90-day investment horizon Johnson Johnson is expected to under-perform the Aptorum Group. But the stock apears to be less risky and, when comparing its historical volatility, Johnson Johnson is 27.13 times less risky than Aptorum Group. The stock trades about 0.0 of its potential returns per unit of risk. The Aptorum Group Ltd is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  500.00  in Aptorum Group Ltd on October 22, 2024 and sell it today you would lose (385.00) from holding Aptorum Group Ltd or give up 77.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.6%
Values	Daily Returns

Johnson Johnson  vs.  Aptorum Group Ltd

Johnson Johnson

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Johnson Johnson has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest conflicting performance, the Stock's basic indicators remain steady and the new chaos on Wall Street may also be a sign of medium-term gains for the company stakeholders.

Aptorum Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aptorum Group Ltd are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Aptorum Group displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Johnson Johnson and Aptorum Group

The main advantage of trading using opposite Johnson Johnson and Aptorum Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johnson Johnson position performs unexpectedly, Aptorum Group 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 Aptorum Group will offset losses from the drop in Aptorum Group's long position.

The idea behind Johnson Johnson and Aptorum Group Ltd 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..