Correlation Between WIMFARM SA and Microsoft
Can any of the company-specific risk be diversified away by investing in both WIMFARM SA 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 WIMFARM SA and Microsoft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WIMFARM SA EO and Microsoft, you can compare the effects of market volatilities on WIMFARM SA 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 WIMFARM SA with a short position of Microsoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIMFARM SA and Microsoft.
Diversification Opportunities for WIMFARM SA and Microsoft
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between WIMFARM and Microsoft is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding WIMFARM SA EO and Microsoft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microsoft and WIMFARM SA 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 WIMFARM SA EO 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 WIMFARM SA i.e., WIMFARM SA and Microsoft go up and down completely randomly.
Pair Corralation between WIMFARM SA and Microsoft
Assuming the 90 days horizon WIMFARM SA EO is expected to under-perform the Microsoft. In addition to that, WIMFARM SA is 3.09 times more volatile than Microsoft. It trades about -0.05 of its total potential returns per unit of risk. Microsoft is currently generating about 0.06 per unit of volatility. If you would invest 33,683 in Microsoft on August 25, 2024 and sell it today you would earn a total of 6,072 from holding Microsoft or generate 18.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WIMFARM SA EO vs. Microsoft
Performance |
| Timeline |
| WIMFARM SA EO |
| Microsoft |
WIMFARM SA and Microsoft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WIMFARM SA and Microsoft
The main advantage of trading using opposite WIMFARM SA and Microsoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WIMFARM SA 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.| WIMFARM SA vs. Superior Plus Corp | WIMFARM SA vs. NMI Holdings | WIMFARM SA vs. Origin Agritech | WIMFARM SA vs. SIVERS SEMICONDUCTORS AB |
| Microsoft vs. HYDROFARM HLD GRP | Microsoft vs. Hanison Construction Holdings | Microsoft vs. LION ONE METALS | Microsoft vs. WIMFARM SA EO |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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