Correlation Between Microsoft and BROADWIND ENRGY
Can any of the company-specific risk be diversified away by investing in both Microsoft and BROADWIND ENRGY 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 Microsoft and BROADWIND ENRGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and BROADWIND ENRGY, you can compare the effects of market volatilities on Microsoft and BROADWIND ENRGY 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 Microsoft with a short position of BROADWIND ENRGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and BROADWIND ENRGY.
Diversification Opportunities for Microsoft and BROADWIND ENRGY
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Microsoft and BROADWIND is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and BROADWIND ENRGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BROADWIND ENRGY and Microsoft 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 Microsoft are associated (or correlated) with BROADWIND ENRGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BROADWIND ENRGY has no effect on the direction of Microsoft i.e., Microsoft and BROADWIND ENRGY go up and down completely randomly.
Pair Corralation between Microsoft and BROADWIND ENRGY
Assuming the 90 days trading horizon Microsoft is expected to generate 0.25 times more return on investment than BROADWIND ENRGY. However, Microsoft is 4.05 times less risky than BROADWIND ENRGY. It trades about 0.22 of its potential returns per unit of risk. BROADWIND ENRGY is currently generating about 0.03 per unit of risk. If you would invest 37,517 in Microsoft on September 1, 2024 and sell it today you would earn a total of 2,328 from holding Microsoft or generate 6.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. BROADWIND ENRGY
Performance |
| Timeline |
| Microsoft |
| BROADWIND ENRGY |
Microsoft and BROADWIND ENRGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and BROADWIND ENRGY
The main advantage of trading using opposite Microsoft and BROADWIND ENRGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, BROADWIND ENRGY 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 BROADWIND ENRGY will offset losses from the drop in BROADWIND ENRGY's long position.| Microsoft vs. Gold Road Resources | Microsoft vs. Air Transport Services | Microsoft vs. Taiwan Semiconductor Manufacturing | Microsoft vs. Nordic Semiconductor ASA |
| BROADWIND ENRGY vs. SIVERS SEMICONDUCTORS AB | BROADWIND ENRGY vs. Darden Restaurants | BROADWIND ENRGY vs. Reliance Steel Aluminum | BROADWIND ENRGY vs. Q2M Managementberatung AG |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |