Correlation Between Cboe UK and Microsoft
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By analyzing existing cross correlation between Cboe UK Consumer and Microsoft, you can compare the effects of market volatilities on Cboe UK 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 Cboe UK with a short position of Microsoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cboe UK and Microsoft.
Diversification Opportunities for Cboe UK and Microsoft
Modest diversification
The 3 months correlation between Cboe and Microsoft is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Cboe UK Consumer and Microsoft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microsoft and Cboe UK 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 Cboe UK Consumer 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 Cboe UK i.e., Cboe UK and Microsoft go up and down completely randomly.
Pair Corralation between Cboe UK and Microsoft
Assuming the 90 days trading horizon Cboe UK Consumer is expected to generate 0.65 times more return on investment than Microsoft. However, Cboe UK Consumer is 1.53 times less risky than Microsoft. It trades about 0.2 of its potential returns per unit of risk. Microsoft is currently generating about 0.02 per unit of risk. If you would invest 2,600,455 in Cboe UK Consumer on September 1, 2024 and sell it today you would earn a total of 659,847 from holding Cboe UK Consumer or generate 25.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cboe UK Consumer vs. Microsoft
Performance |
| Timeline |
Cboe UK and Microsoft Volatility Contrast
Predicted Return Density |
| Returns |
Cboe UK Consumer
Pair trading matchups for Cboe UK
Microsoft
Pair trading matchups for Microsoft
Pair Trading with Cboe UK and Microsoft
The main advantage of trading using opposite Cboe UK and Microsoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cboe UK 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.| Cboe UK vs. Panther Metals PLC | Cboe UK vs. Lundin Mining Corp | Cboe UK vs. Gamma Communications PLC | Cboe UK vs. GoldMining |
| Microsoft vs. Melia Hotels | Microsoft vs. Host Hotels Resorts | Microsoft vs. AcadeMedia AB | Microsoft vs. Grand Vision Media |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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