Correlation Between Johnson Johnson and Strategy Shares
Can any of the company-specific risk be diversified away by investing in both Johnson Johnson and Strategy Shares 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 Strategy Shares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Johnson Johnson and Strategy Shares, you can compare the effects of market volatilities on Johnson Johnson and Strategy Shares 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 Strategy Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johnson Johnson and Strategy Shares.
Diversification Opportunities for Johnson Johnson and Strategy Shares
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Johnson and Strategy is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Johnson and Strategy Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategy Shares 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 Strategy Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategy Shares has no effect on the direction of Johnson Johnson i.e., Johnson Johnson and Strategy Shares go up and down completely randomly.
Pair Corralation between Johnson Johnson and Strategy Shares
Considering the 90-day investment horizon Johnson Johnson is expected to generate 6.88 times more return on investment than Strategy Shares. However, Johnson Johnson is 6.88 times more volatile than Strategy Shares. It trades about 0.21 of its potential returns per unit of risk. Strategy Shares is currently generating about 0.27 per unit of risk. If you would invest 15,329 in Johnson Johnson on June 3, 2025 and sell it today you would earn a total of 2,388 from holding Johnson Johnson or generate 15.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Johnson Johnson vs. Strategy Shares
Performance |
| Timeline |
| Johnson Johnson |
| Strategy Shares |
Johnson Johnson and Strategy Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johnson Johnson and Strategy Shares
The main advantage of trading using opposite Johnson Johnson and Strategy Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johnson Johnson position performs unexpectedly, Strategy Shares 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 Strategy Shares will offset losses from the drop in Strategy Shares' long position.| Johnson Johnson vs. Elanco Animal Health | Johnson Johnson vs. Viatris | Johnson Johnson vs. Lantheus Holdings | Johnson Johnson vs. Haleon plc |
| Strategy Shares vs. Freedom Day Dividend | Strategy Shares vs. iShares MSCI China | Strategy Shares vs. iShares Dividend and | Strategy Shares vs. SmartETFs Dividend Builder |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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