Correlation Between Xerox Corp and Johnson Johnson
Can any of the company-specific risk be diversified away by investing in both Xerox Corp and Johnson Johnson 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 Xerox Corp and Johnson Johnson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xerox Corp and Johnson Johnson, you can compare the effects of market volatilities on Xerox Corp and Johnson Johnson 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 Xerox Corp with a short position of Johnson Johnson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xerox Corp and Johnson Johnson.
Diversification Opportunities for Xerox Corp and Johnson Johnson
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Xerox and Johnson is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Xerox Corp and Johnson Johnson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johnson Johnson and Xerox Corp 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 Xerox Corp are associated (or correlated) with Johnson Johnson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johnson Johnson has no effect on the direction of Xerox Corp i.e., Xerox Corp and Johnson Johnson go up and down completely randomly.
Pair Corralation between Xerox Corp and Johnson Johnson
Considering the 90-day investment horizon Xerox Corp is expected to under-perform the Johnson Johnson. In addition to that, Xerox Corp is 4.36 times more volatile than Johnson Johnson. It trades about -0.1 of its total potential returns per unit of risk. Johnson Johnson is currently generating about 0.2 per unit of volatility. If you would invest 15,413 in Johnson Johnson on June 11, 2025 and sell it today you would earn a total of 2,283 from holding Johnson Johnson or generate 14.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xerox Corp vs. Johnson Johnson
Performance |
| Timeline |
| Xerox Corp |
| Johnson Johnson |
Xerox Corp and Johnson Johnson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xerox Corp and Johnson Johnson
The main advantage of trading using opposite Xerox Corp and Johnson Johnson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xerox Corp position performs unexpectedly, Johnson Johnson 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 Johnson Johnson will offset losses from the drop in Johnson Johnson's long position.| Xerox Corp vs. Conduent | Xerox Corp vs. DXC Technology Co | Xerox Corp vs. Fidelity National Information | Xerox Corp vs. Corning Incorporated |
| Johnson Johnson vs. Expensify | Johnson Johnson vs. MicroAlgo | Johnson Johnson vs. AutoCanada | Johnson Johnson vs. Blackrock Enhanced Equity |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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