Correlation Between Microsoft and JNT
Can any of the company-specific risk be diversified away by investing in both Microsoft and JNT 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 JNT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and JNT, you can compare the effects of market volatilities on Microsoft and JNT 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 JNT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and JNT.
Diversification Opportunities for Microsoft and JNT
Very good diversification
The 3 months correlation between Microsoft and JNT is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and JNT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JNT 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 JNT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JNT has no effect on the direction of Microsoft i.e., Microsoft and JNT go up and down completely randomly.
Pair Corralation between Microsoft and JNT
If you would invest 42,574 in Microsoft on August 29, 2024 and sell it today you would earn a total of 225.00 from holding Microsoft or generate 0.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Microsoft vs. JNT
Performance |
| Timeline |
| Microsoft |
| JNT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Microsoft and JNT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and JNT
The main advantage of trading using opposite Microsoft and JNT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, JNT 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 JNT will offset losses from the drop in JNT's long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Paysafe |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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