Correlation Between JOHNSON and Femasys

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

By analyzing existing cross correlation between JOHNSON JOHNSON 495 and Femasys, you can compare the effects of market volatilities on JOHNSON and Femasys 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 with a short position of Femasys. Check out your portfolio center. Please also check ongoing floating volatility patterns of JOHNSON and Femasys.

Diversification Opportunities for JOHNSON and Femasys

0.05

Correlation Coefficient

JOHNSON  Femasys

Significant diversification

The 3 months correlation between JOHNSON and Femasys is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding JOHNSON JOHNSON 495 and Femasys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Femasys and 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 495 are associated (or correlated) with Femasys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Femasys has no effect on the direction of JOHNSON i.e., JOHNSON and Femasys go up and down completely randomly.

Pair Corralation between JOHNSON and Femasys

Assuming the 90 days trading horizon JOHNSON JOHNSON 495 is expected to generate 0.12 times more return on investment than Femasys. However, JOHNSON JOHNSON 495 is 8.21 times less risky than Femasys. It trades about -0.1 of its potential returns per unit of risk. Femasys is currently generating about -0.04 per unit of risk. If you would invest  10,386  in JOHNSON JOHNSON 495 on October 26, 2024 and sell it today you would lose (287.00) from holding JOHNSON JOHNSON 495 or give up 2.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.72%
Values	Daily Returns

JOHNSON JOHNSON 495  vs.  Femasys

JOHNSON JOHNSON 495

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JOHNSON JOHNSON 495 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, JOHNSON is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Femasys

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Femasys has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with JOHNSON and Femasys

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

The idea behind JOHNSON JOHNSON 495 and Femasys 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.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.