Correlation Between Microsoft and Jpmorgan Smartretirement

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

By analyzing existing cross correlation between Microsoft and Jpmorgan Smartretirement 2030, you can compare the effects of market volatilities on Microsoft and Jpmorgan Smartretirement 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 Jpmorgan Smartretirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Jpmorgan Smartretirement.

Diversification Opportunities for Microsoft and Jpmorgan Smartretirement

0.98

Correlation Coefficient

Microsoft  Jpmorgan Smartretirement

Almost no diversification

The 3 months correlation between Microsoft and JPMORGAN is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Jpmorgan Smartretirement 2030 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Smartretirement 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 Jpmorgan Smartretirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Smartretirement has no effect on the direction of Microsoft i.e., Microsoft and Jpmorgan Smartretirement go up and down completely randomly.

Pair Corralation between Microsoft and Jpmorgan Smartretirement

Given the investment horizon of 90 days Microsoft is expected to generate 2.91 times more return on investment than Jpmorgan Smartretirement. However, Microsoft is 2.91 times more volatile than Jpmorgan Smartretirement 2030. It trades about 0.42 of its potential returns per unit of risk. Jpmorgan Smartretirement 2030 is currently generating about 0.36 per unit of risk. If you would invest  36,615  in Microsoft on April 22, 2025 and sell it today you would earn a total of  14,390  from holding Microsoft or generate 39.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.41%
Values	Daily Returns

Microsoft  vs.  Jpmorgan Smartretirement 2030

Microsoft

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 33 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Microsoft unveiled solid returns over the last few months and may actually be approaching a breakup point.

Jpmorgan Smartretirement

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Smartretirement 2030 are ranked lower than 28 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Jpmorgan Smartretirement may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Microsoft and Jpmorgan Smartretirement

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

The idea behind Microsoft and Jpmorgan Smartretirement 2030 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.