Correlation Between Microsoft and HUDSON GLOBAL
Can any of the company-specific risk be diversified away by investing in both Microsoft and HUDSON GLOBAL 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 HUDSON GLOBAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and HUDSON GLOBAL INCDL 001, you can compare the effects of market volatilities on Microsoft and HUDSON GLOBAL 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 HUDSON GLOBAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and HUDSON GLOBAL.
Diversification Opportunities for Microsoft and HUDSON GLOBAL
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Microsoft and HUDSON is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and HUDSON GLOBAL INCDL 001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUDSON GLOBAL INCDL 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 HUDSON GLOBAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUDSON GLOBAL INCDL has no effect on the direction of Microsoft i.e., Microsoft and HUDSON GLOBAL go up and down completely randomly.
Pair Corralation between Microsoft and HUDSON GLOBAL
Assuming the 90 days trading horizon Microsoft is expected to generate 0.27 times more return on investment than HUDSON GLOBAL. However, Microsoft is 3.71 times less risky than HUDSON GLOBAL. It trades about 0.08 of its potential returns per unit of risk. HUDSON GLOBAL INCDL 001 is currently generating about 0.0 per unit of risk. If you would invest 23,282 in Microsoft on August 26, 2024 and sell it today you would earn a total of 16,473 from holding Microsoft or generate 70.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. HUDSON GLOBAL INCDL 001
Performance |
| Timeline |
| Microsoft |
| HUDSON GLOBAL INCDL |
Microsoft and HUDSON GLOBAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and HUDSON GLOBAL
The main advantage of trading using opposite Microsoft and HUDSON GLOBAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, HUDSON GLOBAL 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 HUDSON GLOBAL will offset losses from the drop in HUDSON GLOBAL's long position.The idea behind Microsoft and HUDSON GLOBAL INCDL 001 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| HUDSON GLOBAL vs. Cleanaway Waste Management | HUDSON GLOBAL vs. Tianjin Capital Environmental | HUDSON GLOBAL vs. Brockhaus Capital Management | HUDSON GLOBAL vs. Jupiter Fund Management |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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