Correlation Between Johnson Johnson and Cell Source

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

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

Diversification Opportunities for Johnson Johnson and Cell Source

0.79

Correlation Coefficient

Johnson Johnson  Cell Source

Poor diversification

The 3 months correlation between Johnson and Cell is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Johnson and Cell Source in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cell Source 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 Cell Source. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cell Source has no effect on the direction of Johnson Johnson i.e., Johnson Johnson and Cell Source go up and down completely randomly.

Pair Corralation between Johnson Johnson and Cell Source

Considering the 90-day investment horizon Johnson Johnson is expected to generate 3.82 times less return on investment than Cell Source. But when comparing it to its historical volatility, Johnson Johnson is 8.92 times less risky than Cell Source. It trades about 0.22 of its potential returns per unit of risk. Cell Source is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  26.00  in Cell Source on May 15, 2025 and sell it today you would earn a total of  9.00  from holding Cell Source or generate 34.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Johnson Johnson  vs.  Cell Source

Johnson Johnson

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Johnson Johnson are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Johnson Johnson revealed solid returns over the last few months and may actually be approaching a breakup point.

Cell Source

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Cell Source are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, Cell Source unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Johnson Johnson and Cell Source

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

The idea behind Johnson Johnson and Cell Source 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.