Correlation Between Microsoft and Jabil Circuit
Can any of the company-specific risk be diversified away by investing in both Microsoft and Jabil Circuit 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 Jabil Circuit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Jabil Circuit, you can compare the effects of market volatilities on Microsoft and Jabil Circuit 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 Jabil Circuit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Jabil Circuit.
Diversification Opportunities for Microsoft and Jabil Circuit
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Microsoft and Jabil is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Jabil Circuit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jabil Circuit 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 Jabil Circuit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jabil Circuit has no effect on the direction of Microsoft i.e., Microsoft and Jabil Circuit go up and down completely randomly.
Pair Corralation between Microsoft and Jabil Circuit
If you would invest 39,793 in Microsoft on January 19, 2024 and sell it today you would earn a total of 1,391 from holding Microsoft or generate 3.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 1.61% |
Values | Daily Returns |
Microsoft vs. Jabil Circuit
Performance |
Timeline |
Microsoft |
Jabil Circuit |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Microsoft and Jabil Circuit Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Microsoft and Jabil Circuit
The main advantage of trading using opposite Microsoft and Jabil Circuit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Jabil Circuit 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 Jabil Circuit will offset losses from the drop in Jabil Circuit's long position.Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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