Correlation Between ISign Media and Microsoft Corp
Can any of the company-specific risk be diversified away by investing in both ISign Media 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 ISign Media and Microsoft Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iSign Media Solutions and Microsoft Corp CDR, you can compare the effects of market volatilities on ISign Media 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 ISign Media with a short position of Microsoft Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of ISign Media and Microsoft Corp.
Diversification Opportunities for ISign Media and Microsoft Corp
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between ISign and Microsoft is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding iSign Media Solutions 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 ISign Media 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 iSign Media Solutions 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 ISign Media i.e., ISign Media and Microsoft Corp go up and down completely randomly.
Pair Corralation between ISign Media and Microsoft Corp
Assuming the 90 days horizon iSign Media Solutions is expected to generate 0.33 times more return on investment than Microsoft Corp. However, iSign Media Solutions is 3.02 times less risky than Microsoft Corp. It trades about 0.05 of its potential returns per unit of risk. Microsoft Corp CDR is currently generating about -0.01 per unit of risk. If you would invest 1,375 in iSign Media Solutions on November 3, 2024 and sell it today you would earn a total of 4.00 from holding iSign Media Solutions or generate 0.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 45.45% |
| Values | Daily Returns |
iSign Media Solutions vs. Microsoft Corp CDR
Performance |
| Timeline |
| iSign Media Solutions |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Microsoft Corp CDR |
ISign Media and Microsoft Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ISign Media and Microsoft Corp
The main advantage of trading using opposite ISign Media and Microsoft Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ISign Media 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.| ISign Media vs. Sylogist | ISign Media vs. Converge Technology Solutions | ISign Media vs. Topicus | ISign Media vs. BMO Aggregate Bond |
| Microsoft Corp vs. BluMetric Environmental | Microsoft Corp vs. Gfl Environmental Holdings | Microsoft Corp vs. First National Financial | Microsoft Corp vs. Fairfax Financial Holdings |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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