Correlation Between Microsoft and Baywa AG
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By analyzing existing cross correlation between Microsoft and Baywa AG Vink, you can compare the effects of market volatilities on Microsoft and Baywa AG 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 Baywa AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Baywa AG.
Diversification Opportunities for Microsoft and Baywa AG
Excellent diversification
The 3 months correlation between Microsoft and Baywa is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Baywa AG Vink in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baywa AG Vink 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 Baywa AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baywa AG Vink has no effect on the direction of Microsoft i.e., Microsoft and Baywa AG go up and down completely randomly.
Pair Corralation between Microsoft and Baywa AG
Assuming the 90 days trading horizon Microsoft is expected to generate 0.51 times more return on investment than Baywa AG. However, Microsoft is 1.97 times less risky than Baywa AG. It trades about 0.08 of its potential returns per unit of risk. Baywa AG Vink is currently generating about -0.09 per unit of risk. If you would invest 23,547 in Microsoft on September 4, 2024 and sell it today you would earn a total of 17,463 from holding Microsoft or generate 74.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Baywa AG Vink
Performance |
| Timeline |
| Microsoft |
| Baywa AG Vink |
Microsoft and Baywa AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Baywa AG
The main advantage of trading using opposite Microsoft and Baywa AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Baywa AG 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 Baywa AG will offset losses from the drop in Baywa AG's long position.| Microsoft vs. VIVA WINE GROUP | Microsoft vs. TSOGO SUN GAMING | Microsoft vs. CVW CLEANTECH INC | Microsoft vs. ETFS Coffee ETC |
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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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