Correlation Between Microsoft and JPP CAPITAL
Can any of the company-specific risk be diversified away by investing in both Microsoft and JPP CAPITAL 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 JPP CAPITAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and JPP CAPITAL FDO, you can compare the effects of market volatilities on Microsoft and JPP CAPITAL 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 JPP CAPITAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and JPP CAPITAL.
Diversification Opportunities for Microsoft and JPP CAPITAL
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Microsoft and JPP is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and JPP CAPITAL FDO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPP CAPITAL FDO 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 JPP CAPITAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPP CAPITAL FDO has no effect on the direction of Microsoft i.e., Microsoft and JPP CAPITAL go up and down completely randomly.
Pair Corralation between Microsoft and JPP CAPITAL
Given the investment horizon of 90 days Microsoft is expected to generate 57.17 times less return on investment than JPP CAPITAL. But when comparing it to its historical volatility, Microsoft is 8.82 times less risky than JPP CAPITAL. It trades about 0.02 of its potential returns per unit of risk. JPP CAPITAL FDO is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 10,738 in JPP CAPITAL FDO on October 24, 2024 and sell it today you would earn a total of 9,262 from holding JPP CAPITAL FDO or generate 86.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.31% |
| Values | Daily Returns |
Microsoft vs. JPP CAPITAL FDO
Performance |
| Timeline |
| Microsoft |
| JPP CAPITAL FDO |
Microsoft and JPP CAPITAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and JPP CAPITAL
The main advantage of trading using opposite Microsoft and JPP CAPITAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, JPP CAPITAL 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 JPP CAPITAL will offset losses from the drop in JPP CAPITAL's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. BLOCK INC | Microsoft vs. Adobe Systems Incorporated |
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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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