Correlation Between Johnson Controls and Comfort Systems
Can any of the company-specific risk be diversified away by investing in both Johnson Controls and Comfort Systems 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 Controls and Comfort Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Johnson Controls International and Comfort Systems USA, you can compare the effects of market volatilities on Johnson Controls and Comfort Systems 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 Controls with a short position of Comfort Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johnson Controls and Comfort Systems.
Diversification Opportunities for Johnson Controls and Comfort Systems
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Johnson and Comfort is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Controls International and Comfort Systems USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comfort Systems USA and Johnson Controls 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 Controls International are associated (or correlated) with Comfort Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comfort Systems USA has no effect on the direction of Johnson Controls i.e., Johnson Controls and Comfort Systems go up and down completely randomly.
Pair Corralation between Johnson Controls and Comfort Systems
Considering the 90-day investment horizon Johnson Controls International is expected to generate 0.41 times more return on investment than Comfort Systems. However, Johnson Controls International is 2.42 times less risky than Comfort Systems. It trades about 0.32 of its potential returns per unit of risk. Comfort Systems USA is currently generating about 0.13 per unit of risk. If you would invest 5,844 in Johnson Controls International on January 24, 2024 and sell it today you would earn a total of 673.00 from holding Johnson Controls International or generate 11.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Johnson Controls International vs. Comfort Systems USA
Performance |
| Timeline |
| Johnson Controls Int |
| Comfort Systems USA |
Johnson Controls and Comfort Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johnson Controls and Comfort Systems
The main advantage of trading using opposite Johnson Controls and Comfort Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johnson Controls position performs unexpectedly, Comfort Systems 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 Comfort Systems will offset losses from the drop in Comfort Systems' long position.| Johnson Controls vs. Janus International Group | Johnson Controls vs. Interface | Johnson Controls vs. Beacon Roofing Supply | Johnson Controls vs. Perma Pipe International Holdings |
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 the Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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