Correlation Between Microsoft and Jaguar Global
Can any of the company-specific risk be diversified away by investing in both Microsoft and Jaguar Global 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 Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Jaguar Global Growth, you can compare the effects of market volatilities on Microsoft and Jaguar Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Jaguar Global.
Diversification Opportunities for Microsoft and Jaguar Global
0.06 | Correlation Coefficient |
Significant 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 Global Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaguar Global Growth 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaguar Global Growth has no effect on the direction of Microsoft i.e., Microsoft and Jaguar Global go up and down completely randomly.
Pair Corralation between Microsoft and Jaguar Global
Given the investment horizon of 90 days Microsoft is expected to generate 22.73 times less return on investment than Jaguar Global. But when comparing it to its historical volatility, Microsoft is 13.93 times less risky than Jaguar Global. It trades about 0.08 of its potential returns per unit of risk. Jaguar Global Growth is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 6.00 in Jaguar Global Growth on September 3, 2024 and sell it today you would earn a total of 11.00 from holding Jaguar Global Growth or generate 183.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 18.99% |
| Values | Daily Returns |
Microsoft vs. Jaguar Global Growth
Performance |
| Timeline |
| Microsoft |
| Jaguar Global Growth |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Microsoft and Jaguar Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Jaguar Global
The main advantage of trading using opposite Microsoft and Jaguar Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Jaguar Global 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 Global will offset losses from the drop in Jaguar Global's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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