Correlation Between Johnson Johnson and Grifols SA

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

Diversification Opportunities for Johnson Johnson and Grifols SA

-0.11
  Correlation Coefficient

Good diversification

The 3 months correlation between Johnson and Grifols is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Johnson and Grifols SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grifols SA ADR 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 Grifols SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grifols SA ADR has no effect on the direction of Johnson Johnson i.e., Johnson Johnson and Grifols SA go up and down completely randomly.

Pair Corralation between Johnson Johnson and Grifols SA

Considering the 90-day investment horizon Johnson Johnson is expected to generate 0.37 times more return on investment than Grifols SA. However, Johnson Johnson is 2.7 times less risky than Grifols SA. It trades about 0.04 of its potential returns per unit of risk. Grifols SA ADR is currently generating about -0.07 per unit of risk. If you would invest  17,640  in Johnson Johnson on April 7, 2022 and sell it today you would earn a total of  174.00  from holding Johnson Johnson or generate 0.99% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.24%
ValuesDaily Returns

Johnson Johnson  vs.  Grifols SA ADR

 Performance (%) 
      Timeline 
Johnson Johnson 
Johnson Performance
0 of 100
Over the last 90 days Johnson Johnson has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Johnson Johnson is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Johnson Price Channel

Grifols SA ADR 
Grifols Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Grifols SA ADR are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Grifols SA may actually be approaching a critical reversion point that can send shares even higher in August 2022.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0709
Payout Ratio
1.34
Last Split Factor
2:1
Forward Annual Dividend Rate
0.91
Dividend Date
2021-06-14
Ex Dividend Date
2021-06-03
Last Split Date
2016-01-04

Grifols Price Channel

Johnson Johnson and Grifols SA Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Johnson Johnson and Grifols SA

The main advantage of trading using opposite Johnson Johnson and Grifols SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johnson Johnson position performs unexpectedly, Grifols SA 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 Grifols SA will offset losses from the drop in Grifols SA's long position.
The idea behind Johnson Johnson and Grifols SA ADR 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.
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 Probability Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

Other Complementary Tools

Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Go
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go
Price Transformation
Use Price Transformation models to analyze depth of different equity instruments across global markets
Go
ETF Directory
Find actively traded Exchange Traded Funds (ETF) from around the world
Go
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Go
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Go