Correlation Between Microsoft and JRSIS Health

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

By analyzing existing cross correlation between Microsoft and JRSIS Health Care, you can compare the effects of market volatilities on Microsoft and JRSIS Health 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 JRSIS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and JRSIS Health.

Diversification Opportunities for Microsoft and JRSIS Health

-0.12

Correlation Coefficient

Microsoft  JRSIS Health

Good diversification

The 3 months correlation between Microsoft and JRSIS is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and JRSIS Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JRSIS Health Care 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 JRSIS Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JRSIS Health Care has no effect on the direction of Microsoft i.e., Microsoft and JRSIS Health go up and down completely randomly.

Pair Corralation between Microsoft and JRSIS Health

Given the investment horizon of 90 days Microsoft is expected to generate 9.87 times less return on investment than JRSIS Health. But when comparing it to its historical volatility, Microsoft is 15.6 times less risky than JRSIS Health. It trades about 0.19 of its potential returns per unit of risk. JRSIS Health Care is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  12.00  in JRSIS Health Care on September 25, 2024 and sell it today you would earn a total of  3.00  from holding JRSIS Health Care or generate 25.0% return on investment over 90 days.

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

Microsoft  vs.  JRSIS Health Care

Microsoft

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Microsoft is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

JRSIS Health Care

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JRSIS Health Care has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Microsoft and JRSIS Health

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

The idea behind Microsoft and JRSIS Health Care 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.