Correlation Between Xcel Energy and Johnson Johnson

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Xcel Energy 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 Xcel Energy and Johnson Johnson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xcel Energy and Johnson Johnson, you can compare the effects of market volatilities on Xcel Energy 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 Xcel Energy with a short position of Johnson Johnson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xcel Energy and Johnson Johnson.

Diversification Opportunities for Xcel Energy and Johnson Johnson

-0.01
  Correlation Coefficient

Good diversification

The 3 months correlation between Xcel Energy and Johnson is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Xcel Energy and Johnson Johnson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johnson Johnson and Xcel Energy 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 Xcel Energy 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 Xcel Energy i.e., Xcel Energy and Johnson Johnson go up and down completely randomly.

Pair Corralation between Xcel Energy and Johnson Johnson

Considering the 90-day investment horizon Xcel Energy is expected to generate 1.65 times more return on investment than Johnson Johnson. However, Xcel Energy is 1.65 times more volatile than Johnson Johnson. It trades about 0.22 of its potential returns per unit of risk. Johnson Johnson is currently generating about 0.28 per unit of risk. If you would invest  6,531  in Xcel Energy on September 3, 2022 and sell it today you would earn a total of  488.00  from holding Xcel Energy or generate 7.47% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

Xcel Energy  vs.  Johnson Johnson

 Performance (%) 
       Timeline  
Xcel Energy 
Xcel Energy Performance
0 of 100
Over the last 90 days Xcel Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady technical and fundamental indicators, Xcel Energy is not utilizing all of its potentials. The latest stock price chaos, may contribute to medium-term losses for the stakeholders.

Xcel Energy 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 conflicting basic indicators, Johnson Johnson may actually be approaching a critical reversion point that can send shares even higher in January 2023.

Johnson Price Channel

Xcel Energy and Johnson Johnson Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Xcel Energy and Johnson Johnson

The main advantage of trading using opposite Xcel Energy and Johnson Johnson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xcel Energy 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.
Xcel Energy vs. Anheuser Busch Inbev
Xcel Energy vs. Etsy Inc
Xcel Energy vs. Linde PLC
Xcel Energy vs. Anheuser-Busch InBev SANV
The idea behind Xcel Energy 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.
Johnson Johnson vs. Linde PLC
Johnson Johnson vs. Anheuser Busch Inbev
Johnson Johnson vs. Etsy Inc
Johnson Johnson vs. Anheuser-Busch InBev SANV
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

Other Complementary Tools

Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Go
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Go
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Go
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Go
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Go
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Go
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Go
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Go