Correlation Between Applied Digital and MICROSOFT
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By analyzing existing cross correlation between Applied Digital and MICROSOFT PORATION, you can compare the effects of market volatilities on Applied Digital 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 Applied Digital with a short position of MICROSOFT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Digital and MICROSOFT.
Diversification Opportunities for Applied Digital and MICROSOFT
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Applied and MICROSOFT is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Applied Digital and MICROSOFT PORATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MICROSOFT PORATION and Applied Digital 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 Applied Digital 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 PORATION has no effect on the direction of Applied Digital i.e., Applied Digital and MICROSOFT go up and down completely randomly.
Pair Corralation between Applied Digital and MICROSOFT
Given the investment horizon of 90 days Applied Digital is expected to generate 6.66 times more return on investment than MICROSOFT. However, Applied Digital is 6.66 times more volatile than MICROSOFT PORATION. It trades about 0.07 of its potential returns per unit of risk. MICROSOFT PORATION is currently generating about -0.01 per unit of risk. If you would invest 196.00 in Applied Digital on December 4, 2024 and sell it today you would earn a total of 492.00 from holding Applied Digital or generate 251.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.39% |
| Values | Daily Returns |
Applied Digital vs. MICROSOFT PORATION
Performance |
| Timeline |
| Applied Digital |
| MICROSOFT PORATION |
Applied Digital and MICROSOFT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Digital and MICROSOFT
The main advantage of trading using opposite Applied Digital and MICROSOFT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Digital 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.| Applied Digital vs. Magic Empire Global | Applied Digital vs. Zhong Yang Financial | Applied Digital vs. Netcapital | Applied Digital vs. Lazard |
| MICROSOFT vs. FTAI Aviation Ltd | MICROSOFT vs. Avis Budget Group | MICROSOFT vs. Idaho Strategic Resources | MICROSOFT vs. Eldorado Gold Corp |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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