Correlation Between Chugai Pharmaceutical and Johnson Johnson

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

Diversification Opportunities for Chugai Pharmaceutical and Johnson Johnson

  Correlation Coefficient

Excellent diversification

The 3 months correlation between Chugai and Johnson is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Chugai Pharmaceutical and Johnson Johnson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johnson Johnson and Chugai Pharmaceutical 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 Chugai Pharmaceutical 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 Chugai Pharmaceutical i.e., Chugai Pharmaceutical and Johnson Johnson go up and down completely randomly.

Pair Corralation between Chugai Pharmaceutical and Johnson Johnson

Assuming the 90 days horizon Chugai Pharmaceutical is expected to under-perform the Johnson Johnson. In addition to that, Chugai Pharmaceutical is 1.64 times more volatile than Johnson Johnson. It trades about -0.09 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  15,914  in Johnson Johnson on February 21, 2022 and sell it today you would earn a total of  1,784  from holding Johnson Johnson or generate 11.21% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
ValuesDaily Returns

Chugai Pharmaceutical  vs.  Johnson Johnson

 Performance (%) 
Chugai Pharmaceutical 
Chugai Performance
0 of 100
Over the last 90 days Chugai Pharmaceutical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in June 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Chugai Price Channel

Johnson Johnson 
Johnson Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Johnson Johnson are ranked lower than 8 (%) 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 June 2022.

Johnson Price Channel

Chugai Pharmaceutical and Johnson Johnson Volatility Contrast

 Predicted Return Density 

Pair Trading with Chugai Pharmaceutical and Johnson Johnson

The main advantage of trading using opposite Chugai Pharmaceutical and Johnson Johnson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chugai Pharmaceutical 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.
The idea behind Chugai Pharmaceutical 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

Pair trading matchups for Johnson Johnson

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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

Other Complementary Tools

Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Stock Screener
Find equities using custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.