Correlation Between Microsoft and EDP -
Can any of the company-specific risk be diversified away by investing in both Microsoft and EDP - 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 EDP - into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and EDP Energias, you can compare the effects of market volatilities on Microsoft and EDP - 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 EDP -. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and EDP -.
Diversification Opportunities for Microsoft and EDP -
Modest diversification
The 3 months correlation between Microsoft and EDP is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and EDP Energias in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EDP Energias 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 EDP -. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EDP Energias has no effect on the direction of Microsoft i.e., Microsoft and EDP - go up and down completely randomly.
Pair Corralation between Microsoft and EDP -
Assuming the 90 days trading horizon Microsoft is expected to generate 0.93 times more return on investment than EDP -. However, Microsoft is 1.08 times less risky than EDP -. It trades about 0.08 of its potential returns per unit of risk. EDP Energias is currently generating about -0.04 per unit of risk. If you would invest 22,966 in Microsoft on November 29, 2024 and sell it today you would earn a total of 15,359 from holding Microsoft or generate 66.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Microsoft vs. EDP Energias
Performance |
| Timeline |
| Microsoft |
| EDP Energias |
Microsoft and EDP - Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and EDP -
The main advantage of trading using opposite Microsoft and EDP - positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, EDP - 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 EDP - will offset losses from the drop in EDP -'s long position.| Microsoft vs. Direct Line Insurance | Microsoft vs. United Overseas Insurance | Microsoft vs. ANTA Sports Products | Microsoft vs. DICKS Sporting Goods |
| EDP - vs. MagnaChip Semiconductor Corp | EDP - vs. DATAGROUP SE | EDP - vs. AIR PRODCHEMICALS | EDP - vs. Information Services International Dentsu |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |