Correlation Between Microsoft and ATOSS SOFTWARE
Can any of the company-specific risk be diversified away by investing in both Microsoft and ATOSS SOFTWARE 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 ATOSS SOFTWARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and ATOSS SOFTWARE, you can compare the effects of market volatilities on Microsoft and ATOSS SOFTWARE 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 ATOSS SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and ATOSS SOFTWARE.
Diversification Opportunities for Microsoft and ATOSS SOFTWARE
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Microsoft and ATOSS is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and ATOSS SOFTWARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATOSS SOFTWARE 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 ATOSS SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATOSS SOFTWARE has no effect on the direction of Microsoft i.e., Microsoft and ATOSS SOFTWARE go up and down completely randomly.
Pair Corralation between Microsoft and ATOSS SOFTWARE
Assuming the 90 days trading horizon Microsoft is expected to under-perform the ATOSS SOFTWARE. But the stock apears to be less risky and, when comparing its historical volatility, Microsoft is 1.66 times less risky than ATOSS SOFTWARE. The stock trades about -0.01 of its potential returns per unit of risk. The ATOSS SOFTWARE is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 10,960 in ATOSS SOFTWARE on September 29, 2024 and sell it today you would earn a total of 420.00 from holding ATOSS SOFTWARE or generate 3.83% 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. ATOSS SOFTWARE
Performance |
| Timeline |
| Microsoft |
| ATOSS SOFTWARE |
Microsoft and ATOSS SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and ATOSS SOFTWARE
The main advantage of trading using opposite Microsoft and ATOSS SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, ATOSS SOFTWARE 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 ATOSS SOFTWARE will offset losses from the drop in ATOSS SOFTWARE's long position.| Microsoft vs. X FAB Silicon Foundries | Microsoft vs. SEKISUI CHEMICAL | Microsoft vs. 24SEVENOFFICE GROUP AB | Microsoft vs. International Consolidated Airlines |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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