Correlation Between Microsoft and JLF INVESTMENT
Can any of the company-specific risk be diversified away by investing in both Microsoft and JLF INVESTMENT 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 Microsoft and JLF INVESTMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and JLF INVESTMENT, you can compare the effects of market volatilities on Microsoft and JLF INVESTMENT 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 Microsoft with a short position of JLF INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and JLF INVESTMENT.
Diversification Opportunities for Microsoft and JLF INVESTMENT
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Microsoft and JLF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and JLF INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JLF INVESTMENT and Microsoft 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 Microsoft are associated (or correlated) with JLF INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JLF INVESTMENT has no effect on the direction of Microsoft i.e., Microsoft and JLF INVESTMENT go up and down completely randomly.
Pair Corralation between Microsoft and JLF INVESTMENT
Assuming the 90 days trading horizon Microsoft is expected to generate 0.47 times more return on investment than JLF INVESTMENT. However, Microsoft is 2.15 times less risky than JLF INVESTMENT. It trades about 0.1 of its potential returns per unit of risk. JLF INVESTMENT is currently generating about -0.03 per unit of risk. If you would invest 21,788 in Microsoft on September 19, 2024 and sell it today you would earn a total of 21,292 from holding Microsoft or generate 97.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Microsoft vs. JLF INVESTMENT
Performance |
| Timeline |
| Microsoft |
| JLF INVESTMENT |
Microsoft and JLF INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and JLF INVESTMENT
The main advantage of trading using opposite Microsoft and JLF INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, JLF INVESTMENT 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 JLF INVESTMENT will offset losses from the drop in JLF INVESTMENT's long position.| Microsoft vs. MUTUIONLINE | Microsoft vs. Evolution Mining Limited | Microsoft vs. BE Semiconductor Industries | Microsoft vs. PACIFIC ONLINE |
| JLF INVESTMENT vs. Apple Inc | JLF INVESTMENT vs. Apple Inc | JLF INVESTMENT vs. Apple Inc | JLF INVESTMENT vs. Microsoft |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |