Correlation Between JLT MOBILE and Microsoft

Can any of the company-specific risk be diversified away by investing in both JLT MOBILE and Microsoft 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 JLT MOBILE and Microsoft into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between JLT MOBILE PUTER and Microsoft, you can compare the effects of market volatilities on JLT MOBILE and Microsoft 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 JLT MOBILE with a short position of Microsoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLT MOBILE and Microsoft.

Diversification Opportunities for JLT MOBILE and Microsoft

-0.88

Correlation Coefficient

JLT MOBILE  Microsoft

Pay attention - limited upside

The 3 months correlation between JLT and Microsoft is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding JLT MOBILE PUTER and Microsoft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microsoft and JLT MOBILE 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 JLT MOBILE PUTER are associated (or correlated) with Microsoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microsoft has no effect on the direction of JLT MOBILE i.e., JLT MOBILE and Microsoft go up and down completely randomly.

Pair Corralation between JLT MOBILE and Microsoft

Assuming the 90 days trading horizon JLT MOBILE PUTER is expected to under-perform the Microsoft. In addition to that, JLT MOBILE is 2.16 times more volatile than Microsoft. It trades about -0.06 of its total potential returns per unit of risk. Microsoft is currently generating about 0.08 per unit of volatility. If you would invest  30,145  in Microsoft on September 28, 2024 and sell it today you would earn a total of  11,685  from holding Microsoft or generate 38.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

JLT MOBILE PUTER  vs.  Microsoft

JLT MOBILE PUTER

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JLT MOBILE PUTER has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Microsoft

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, Microsoft may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with JLT MOBILE and Microsoft

The main advantage of trading using opposite JLT MOBILE and Microsoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLT MOBILE position performs unexpectedly, Microsoft 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 Microsoft will offset losses from the drop in Microsoft's long position.

The idea behind JLT MOBILE PUTER and Microsoft pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..