Correlation Between Microsoft and EAT WELL
Can any of the company-specific risk be diversified away by investing in both Microsoft and EAT WELL 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 EAT WELL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and EAT WELL INVESTMENT, you can compare the effects of market volatilities on Microsoft and EAT WELL 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 EAT WELL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and EAT WELL.
Diversification Opportunities for Microsoft and EAT WELL
Pay attention - limited upside
The 3 months correlation between Microsoft and EAT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and EAT WELL INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EAT WELL INVESTMENT 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 EAT WELL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EAT WELL INVESTMENT has no effect on the direction of Microsoft i.e., Microsoft and EAT WELL go up and down completely randomly.
Pair Corralation between Microsoft and EAT WELL
Assuming the 90 days trading horizon Microsoft is expected to generate 0.54 times more return on investment than EAT WELL. However, Microsoft is 1.86 times less risky than EAT WELL. It trades about 0.09 of its potential returns per unit of risk. EAT WELL INVESTMENT is currently generating about 0.0 per unit of risk. If you would invest 23,226 in Microsoft on November 1, 2024 and sell it today you would earn a total of 16,654 from holding Microsoft or generate 71.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Microsoft vs. EAT WELL INVESTMENT
Performance |
| Timeline |
| Microsoft |
| EAT WELL INVESTMENT |
Microsoft and EAT WELL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and EAT WELL
The main advantage of trading using opposite Microsoft and EAT WELL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, EAT WELL 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 EAT WELL will offset losses from the drop in EAT WELL's long position.| Microsoft vs. CARSALESCOM | Microsoft vs. SPORT LISBOA E | Microsoft vs. DICKS Sporting Goods | Microsoft vs. PARKEN Sport Entertainment |
| EAT WELL vs. Blackstone Group | EAT WELL vs. The Bank of | EAT WELL vs. Ameriprise Financial | EAT WELL vs. State Street |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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