Correlation Between Johnson Johnson and SPDR SSGA
Can any of the company-specific risk be diversified away by investing in both Johnson Johnson and SPDR SSGA 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 SPDR SSGA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Johnson Johnson and SPDR SSGA My2029, you can compare the effects of market volatilities on Johnson Johnson and SPDR SSGA 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 SPDR SSGA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johnson Johnson and SPDR SSGA.
Diversification Opportunities for Johnson Johnson and SPDR SSGA
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Johnson and SPDR is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Johnson and SPDR SSGA My2029 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SSGA My2029 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 SPDR SSGA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SSGA My2029 has no effect on the direction of Johnson Johnson i.e., Johnson Johnson and SPDR SSGA go up and down completely randomly.
Pair Corralation between Johnson Johnson and SPDR SSGA
Considering the 90-day investment horizon Johnson Johnson is expected to generate 9.04 times more return on investment than SPDR SSGA. However, Johnson Johnson is 9.04 times more volatile than SPDR SSGA My2029. It trades about 0.29 of its potential returns per unit of risk. SPDR SSGA My2029 is currently generating about 0.27 per unit of risk. If you would invest 17,694 in Johnson Johnson on September 1, 2025 and sell it today you would earn a total of 2,998 from holding Johnson Johnson or generate 16.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Johnson Johnson vs. SPDR SSGA My2029
Performance |
| Timeline |
| Johnson Johnson |
| SPDR SSGA My2029 |
Johnson Johnson and SPDR SSGA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johnson Johnson and SPDR SSGA
The main advantage of trading using opposite Johnson Johnson and SPDR SSGA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johnson Johnson position performs unexpectedly, SPDR SSGA 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 SPDR SSGA will offset losses from the drop in SPDR SSGA's long position.| Johnson Johnson vs. Triumph Apparel | Johnson Johnson vs. British American Tobacco | Johnson Johnson vs. Delta Apparel, | Johnson Johnson vs. Grounded People Apparel |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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