Correlation Between Microsoft and Aya Gold
Can any of the company-specific risk be diversified away by investing in both Microsoft and Aya Gold 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 Aya Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Aya Gold Silver, you can compare the effects of market volatilities on Microsoft and Aya Gold 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 Aya Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Aya Gold.
Diversification Opportunities for Microsoft and Aya Gold
Pay attention - limited upside
The 3 months correlation between Microsoft and Aya is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Aya Gold Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aya Gold Silver 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 Aya Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aya Gold Silver has no effect on the direction of Microsoft i.e., Microsoft and Aya Gold go up and down completely randomly.
Pair Corralation between Microsoft and Aya Gold
Assuming the 90 days trading horizon Microsoft is expected to generate 0.35 times more return on investment than Aya Gold. However, Microsoft is 2.85 times less risky than Aya Gold. It trades about -0.19 of its potential returns per unit of risk. Aya Gold Silver is currently generating about -0.38 per unit of risk. If you would invest 42,365 in Microsoft on October 11, 2024 and sell it today you would lose (1,270) from holding Microsoft or give up 3.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Aya Gold Silver
Performance |
| Timeline |
| Microsoft |
| Aya Gold Silver |
Microsoft and Aya Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Aya Gold
The main advantage of trading using opposite Microsoft and Aya Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Aya Gold 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 Aya Gold will offset losses from the drop in Aya Gold's long position.| Microsoft vs. Canadian Utilities Limited | Microsoft vs. Chesapeake Utilities | Microsoft vs. Goodyear Tire Rubber | Microsoft vs. Martin Marietta Materials |
| Aya Gold vs. ORMAT TECHNOLOGIES | Aya Gold vs. Sunny Optical Technology | Aya Gold vs. CARSALESCOM | Aya Gold vs. Kingdee International Software |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |