Correlation Between Microsoft and Vestas Wind
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By analyzing existing cross correlation between Microsoft and Vestas Wind Systems, you can compare the effects of market volatilities on Microsoft and Vestas Wind 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 Vestas Wind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Vestas Wind.
Diversification Opportunities for Microsoft and Vestas Wind
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Microsoft and Vestas is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Vestas Wind Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestas Wind Systems 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 Vestas Wind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestas Wind Systems has no effect on the direction of Microsoft i.e., Microsoft and Vestas Wind go up and down completely randomly.
Pair Corralation between Microsoft and Vestas Wind
Assuming the 90 days trading horizon Microsoft is expected to under-perform the Vestas Wind. But the stock apears to be less risky and, when comparing its historical volatility, Microsoft is 3.19 times less risky than Vestas Wind. The stock trades about -0.02 of its potential returns per unit of risk. The Vestas Wind Systems is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,279 in Vestas Wind Systems on October 21, 2024 and sell it today you would earn a total of 1.00 from holding Vestas Wind Systems or generate 0.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Vestas Wind Systems
Performance |
| Timeline |
| Microsoft |
| Vestas Wind Systems |
Microsoft and Vestas Wind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Vestas Wind
The main advantage of trading using opposite Microsoft and Vestas Wind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Vestas Wind 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 Vestas Wind will offset losses from the drop in Vestas Wind's long position.| Microsoft vs. Solstad Offshore ASA | Microsoft vs. SOFI TECHNOLOGIES | Microsoft vs. PKSHA TECHNOLOGY INC | Microsoft vs. THORNEY TECHS LTD |
| Vestas Wind vs. FIREWEED METALS P | Vestas Wind vs. AWILCO DRILLING PLC | Vestas Wind vs. Osisko Metals | Vestas Wind vs. PRECISION DRILLING P |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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