Correlation Between Johnson Johnson and Osisko Mining

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

By analyzing existing cross correlation between Johnson Johnson and Osisko Mining, you can compare the effects of market volatilities on Johnson Johnson and Osisko Mining 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 Osisko Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johnson Johnson and Osisko Mining.

Diversification Opportunities for Johnson Johnson and Osisko Mining

-0.39

Correlation Coefficient

Johnson Johnson  Osisko Mining

Very good diversification

The 3 months correlation between Johnson and Osisko is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Johnson and Osisko Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osisko Mining 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 Osisko Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osisko Mining has no effect on the direction of Johnson Johnson i.e., Johnson Johnson and Osisko Mining go up and down completely randomly.

Pair Corralation between Johnson Johnson and Osisko Mining

Considering the 90-day investment horizon Johnson Johnson is expected to under-perform the Osisko Mining. In addition to that, Johnson Johnson is 3.31 times more volatile than Osisko Mining. It trades about -0.17 of its total potential returns per unit of risk. Osisko Mining is currently generating about -0.37 per unit of volatility. If you would invest  357.00  in Osisko Mining on October 7, 2024 and sell it today you would lose (6.00) from holding Osisko Mining or give up 1.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	28.57%
Values	Daily Returns

Johnson Johnson  vs.  Osisko Mining

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.

Osisko Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Osisko Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Osisko Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Johnson Johnson and Osisko Mining

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

The idea behind Johnson Johnson and Osisko Mining 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.