Correlation Between Unisys Corp and Johnson Johnson

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Can any of the company-specific risk be diversified away by investing in both Unisys 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 Unisys 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 Unisys Corp and Johnson Johnson, you can compare the effects of market volatilities on Unisys 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 Unisys Corp with a short position of Johnson Johnson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unisys Corp and Johnson Johnson.

Diversification Opportunities for Unisys Corp and Johnson Johnson

-0.68
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Unisys and Johnson is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Unisys Corp and Johnson Johnson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johnson Johnson and Unisys 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 Unisys 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 Unisys Corp i.e., Unisys Corp and Johnson Johnson go up and down completely randomly.

Pair Corralation between Unisys Corp and Johnson Johnson

Considering the 90-day investment horizon Unisys Corp is expected to under-perform the Johnson Johnson. In addition to that, Unisys Corp is 4.52 times more volatile than Johnson Johnson. It trades about -0.14 of its total potential returns per unit of risk. Johnson Johnson is currently generating about 0.04 per unit of volatility. If you would invest  16,522  in Johnson Johnson on August 30, 2022 and sell it today you would earn a total of  1,177  from holding Johnson Johnson or generate 7.12% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Unisys Corp  vs.  Johnson Johnson

 Performance (%) 
       Timeline  
Unisys Corp 
Unisys Performance
0 of 100
Over the last 90 days Unisys Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with sluggish performance in the last few months, the Stock's forward indicators remain relatively invariable which may send shares a bit higher in December 2022. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Unisys Price Channel

Johnson Johnson 
Johnson Performance
10 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Johnson Johnson are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Johnson Johnson may actually be approaching a critical reversion point that can send shares even higher in December 2022.

Johnson Price Channel

Unisys Corp and Johnson Johnson Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Unisys Corp and Johnson Johnson

The main advantage of trading using opposite Unisys Corp and Johnson Johnson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unisys 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.
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The idea behind Unisys Corp and Johnson Johnson 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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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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