Correlation Between Microsoft and Komercn Banka
Can any of the company-specific risk be diversified away by investing in both Microsoft and Komercn Banka 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 Komercn Banka into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Komercn banka as, you can compare the effects of market volatilities on Microsoft and Komercn Banka 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 Komercn Banka. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Komercn Banka.
Diversification Opportunities for Microsoft and Komercn Banka
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Microsoft and Komercn is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Komercn banka as in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Komercn banka as 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 Komercn Banka. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Komercn banka as has no effect on the direction of Microsoft i.e., Microsoft and Komercn Banka go up and down completely randomly.
Pair Corralation between Microsoft and Komercn Banka
Assuming the 90 days trading horizon Microsoft is expected to generate 0.96 times more return on investment than Komercn Banka. However, Microsoft is 1.04 times less risky than Komercn Banka. It trades about 0.25 of its potential returns per unit of risk. Komercn banka as is currently generating about 0.01 per unit of risk. If you would invest 37,536 in Microsoft on September 1, 2024 and sell it today you would earn a total of 2,524 from holding Microsoft or generate 6.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Komercn banka as
Performance |
| Timeline |
| Microsoft |
| Komercn banka as |
Microsoft and Komercn Banka Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Komercn Banka
The main advantage of trading using opposite Microsoft and Komercn Banka positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Komercn Banka 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 Komercn Banka will offset losses from the drop in Komercn Banka's long position.| Microsoft vs. Coeur Mining | Microsoft vs. MINCO SILVER | Microsoft vs. MAGNUM MINING EXP | Microsoft vs. Perseus Mining Limited |
| Komercn Banka vs. BNP Paribas SA | Komercn Banka vs. Socit Gnrale Socit | Komercn Banka vs. Commerzbank AG | Komercn Banka vs. Commerzbank AG |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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