Correlation Between Microsoft and Jasper Therapeutics
Can any of the company-specific risk be diversified away by investing in both Microsoft and Jasper Therapeutics 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 Jasper Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Jasper Therapeutics, you can compare the effects of market volatilities on Microsoft and Jasper Therapeutics 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 Jasper Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Jasper Therapeutics.
Diversification Opportunities for Microsoft and Jasper Therapeutics
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Jasper is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Jasper Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jasper Therapeutics 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 Jasper Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jasper Therapeutics has no effect on the direction of Microsoft i.e., Microsoft and Jasper Therapeutics go up and down completely randomly.
Pair Corralation between Microsoft and Jasper Therapeutics
Given the investment horizon of 90 days Microsoft is expected to generate 52.81 times less return on investment than Jasper Therapeutics. But when comparing it to its historical volatility, Microsoft is 45.59 times less risky than Jasper Therapeutics. It trades about 0.06 of its potential returns per unit of risk. Jasper Therapeutics is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 12.00 in Jasper Therapeutics on September 1, 2024 and sell it today you would earn a total of 8.00 from holding Jasper Therapeutics or generate 66.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 84.41% |
| Values | Daily Returns |
Microsoft vs. Jasper Therapeutics
Performance |
| Timeline |
| Microsoft |
| Jasper Therapeutics |
Microsoft and Jasper Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Jasper Therapeutics
The main advantage of trading using opposite Microsoft and Jasper Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Jasper Therapeutics 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 Jasper Therapeutics will offset losses from the drop in Jasper Therapeutics' long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Jasper Therapeutics vs. SAB Biotherapeutics | Jasper Therapeutics vs. NRx Pharmaceuticals | Jasper Therapeutics vs. Celularity |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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