Correlation Between Microsoft and Jaguar Animal
Can any of the company-specific risk be diversified away by investing in both Microsoft and Jaguar Animal 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 Jaguar Animal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Jaguar Animal Health, you can compare the effects of market volatilities on Microsoft and Jaguar Animal 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 Jaguar Animal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Jaguar Animal.
Diversification Opportunities for Microsoft and Jaguar Animal
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Jaguar is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Jaguar Animal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaguar Animal Health 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 Jaguar Animal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaguar Animal Health has no effect on the direction of Microsoft i.e., Microsoft and Jaguar Animal go up and down completely randomly.
Pair Corralation between Microsoft and Jaguar Animal
Given the investment horizon of 90 days Microsoft is expected to generate 0.32 times more return on investment than Jaguar Animal. However, Microsoft is 3.14 times less risky than Jaguar Animal. It trades about 0.0 of its potential returns per unit of risk. Jaguar Animal Health is currently generating about -0.07 per unit of risk. If you would invest 42,574 in Microsoft on August 29, 2024 and sell it today you would lose (188.00) from holding Microsoft or give up 0.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Jaguar Animal Health
Performance |
| Timeline |
| Microsoft |
| Jaguar Animal Health |
Microsoft and Jaguar Animal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Jaguar Animal
The main advantage of trading using opposite Microsoft and Jaguar Animal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Jaguar Animal 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 Jaguar Animal will offset losses from the drop in Jaguar Animal's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Jaguar Animal vs. Ibio Inc | Jaguar Animal vs. GeoVax Labs | Jaguar Animal vs. Ocugen Inc | Jaguar Animal vs. Zura Bio Limited |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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