Correlation Between Microsoft and Glaston Oyj
Can any of the company-specific risk be diversified away by investing in both Microsoft and Glaston Oyj 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 Glaston Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Glaston Oyj Abp, you can compare the effects of market volatilities on Microsoft and Glaston Oyj 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 Glaston Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Glaston Oyj.
Diversification Opportunities for Microsoft and Glaston Oyj
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Microsoft and Glaston is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Glaston Oyj Abp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glaston Oyj Abp 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 Glaston Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glaston Oyj Abp has no effect on the direction of Microsoft i.e., Microsoft and Glaston Oyj go up and down completely randomly.
Pair Corralation between Microsoft and Glaston Oyj
Assuming the 90 days trading horizon Microsoft is expected to generate 0.86 times more return on investment than Glaston Oyj. However, Microsoft is 1.17 times less risky than Glaston Oyj. It trades about 0.02 of its potential returns per unit of risk. Glaston Oyj Abp is currently generating about -0.15 per unit of risk. If you would invest 39,248 in Microsoft on August 24, 2024 and sell it today you would earn a total of 107.00 from holding Microsoft or generate 0.27% 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. Glaston Oyj Abp
Performance |
| Timeline |
| Microsoft |
| Glaston Oyj Abp |
Microsoft and Glaston Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Glaston Oyj
The main advantage of trading using opposite Microsoft and Glaston Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Glaston Oyj 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 Glaston Oyj will offset losses from the drop in Glaston Oyj's long position.| Microsoft vs. DiamondRock Hospitality | Microsoft vs. Cardinal Health | Microsoft vs. GUARDANT HEALTH CL | Microsoft vs. NORDHEALTH AS NK |
| Glaston Oyj vs. Vulcan Materials | Glaston Oyj vs. MSAD INSURANCE | Glaston Oyj vs. Goosehead Insurance | Glaston Oyj vs. Insurance Australia Group |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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