Correlation Between Microsoft and Jade Leader
Can any of the company-specific risk be diversified away by investing in both Microsoft and Jade Leader 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 Jade Leader into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Jade Leader Corp, you can compare the effects of market volatilities on Microsoft and Jade Leader 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 Jade Leader. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Jade Leader.
Diversification Opportunities for Microsoft and Jade Leader
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Jade is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Jade Leader Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jade Leader Corp 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 Jade Leader. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jade Leader Corp has no effect on the direction of Microsoft i.e., Microsoft and Jade Leader go up and down completely randomly.
Pair Corralation between Microsoft and Jade Leader
Given the investment horizon of 90 days Microsoft is expected to under-perform the Jade Leader. But the stock apears to be less risky and, when comparing its historical volatility, Microsoft is 12.36 times less risky than Jade Leader. The stock trades about -0.01 of its potential returns per unit of risk. The Jade Leader Corp is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 3.00 in Jade Leader Corp on November 3, 2024 and sell it today you would earn a total of 1.00 from holding Jade Leader Corp or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Microsoft vs. Jade Leader Corp
Performance |
| Timeline |
| Microsoft |
| Jade Leader Corp |
Microsoft and Jade Leader Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Jade Leader
The main advantage of trading using opposite Microsoft and Jade Leader positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Jade Leader 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 Jade Leader will offset losses from the drop in Jade Leader's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Adobe Systems Incorporated | Microsoft vs. Crowdstrike Holdings |
| Jade Leader vs. 2028 Investment Grade | Jade Leader vs. Maple Peak Investments | Jade Leader vs. Brookfield Asset Management | Jade Leader vs. Costco Wholesale Corp |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |