Correlation Between Microsoft and JLT MOBILE
Can any of the company-specific risk be diversified away by investing in both Microsoft and JLT MOBILE 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 JLT MOBILE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and JLT MOBILE PUTER, you can compare the effects of market volatilities on Microsoft and JLT MOBILE 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 JLT MOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and JLT MOBILE.
Diversification Opportunities for Microsoft and JLT MOBILE
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Microsoft and JLT is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and JLT MOBILE PUTER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JLT MOBILE PUTER 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 JLT MOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JLT MOBILE PUTER has no effect on the direction of Microsoft i.e., Microsoft and JLT MOBILE go up and down completely randomly.
Pair Corralation between Microsoft and JLT MOBILE
Assuming the 90 days trading horizon Microsoft is expected to generate 0.45 times more return on investment than JLT MOBILE. However, Microsoft is 2.24 times less risky than JLT MOBILE. It trades about 0.2 of its potential returns per unit of risk. JLT MOBILE PUTER is currently generating about -0.18 per unit of risk. If you would invest 37,655 in Microsoft on September 1, 2024 and sell it today you would earn a total of 2,230 from holding Microsoft or generate 5.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. JLT MOBILE PUTER
Performance |
| Timeline |
| Microsoft |
| JLT MOBILE PUTER |
Microsoft and JLT MOBILE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and JLT MOBILE
The main advantage of trading using opposite Microsoft and JLT MOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, JLT MOBILE 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 JLT MOBILE will offset losses from the drop in JLT MOBILE's long position.| Microsoft vs. Pentair plc | Microsoft vs. Norwegian Air Shuttle | Microsoft vs. GEELY AUTOMOBILE | Microsoft vs. DELTA AIR LINES |
| JLT MOBILE vs. SIVERS SEMICONDUCTORS AB | JLT MOBILE vs. Darden Restaurants | JLT MOBILE vs. Reliance Steel Aluminum | JLT MOBILE vs. Q2M Managementberatung AG |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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