Correlation Between Fortis Pref and Microsoft Corp
Can any of the company-specific risk be diversified away by investing in both Fortis Pref and Microsoft Corp 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 Fortis Pref and Microsoft Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortis Pref M and Microsoft Corp CDR, you can compare the effects of market volatilities on Fortis Pref and Microsoft Corp 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 Fortis Pref with a short position of Microsoft Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortis Pref and Microsoft Corp.
Diversification Opportunities for Fortis Pref and Microsoft Corp
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Fortis and Microsoft is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Fortis Pref M and Microsoft Corp CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microsoft Corp CDR and Fortis Pref 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 Fortis Pref M are associated (or correlated) with Microsoft Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microsoft Corp CDR has no effect on the direction of Fortis Pref i.e., Fortis Pref and Microsoft Corp go up and down completely randomly.
Pair Corralation between Fortis Pref and Microsoft Corp
Assuming the 90 days trading horizon Fortis Pref is expected to generate 1.77 times less return on investment than Microsoft Corp. But when comparing it to its historical volatility, Fortis Pref M is 1.66 times less risky than Microsoft Corp. It trades about 0.2 of its potential returns per unit of risk. Microsoft Corp CDR is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 3,113 in Microsoft Corp CDR on September 15, 2024 and sell it today you would earn a total of 156.00 from holding Microsoft Corp CDR or generate 5.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Fortis Pref M vs. Microsoft Corp CDR
Performance |
| Timeline |
| Fortis Pref M |
| Microsoft Corp CDR |
Fortis Pref and Microsoft Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortis Pref and Microsoft Corp
The main advantage of trading using opposite Fortis Pref and Microsoft Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortis Pref position performs unexpectedly, Microsoft Corp 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 Corp will offset losses from the drop in Microsoft Corp's long position.| Fortis Pref vs. Maple Leaf Foods | Fortis Pref vs. Atrium Mortgage Investment | Fortis Pref vs. Solid Impact Investments | Fortis Pref vs. American Hotel Income |
| Microsoft Corp vs. Nicola Mining | Microsoft Corp vs. Metalero Mining Corp | Microsoft Corp vs. Mako Mining Corp | Microsoft Corp vs. Evertz Technologies Limited |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |