Correlation Between Microsoft and SUMMARECON AGUNG
Can any of the company-specific risk be diversified away by investing in both Microsoft and SUMMARECON AGUNG 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 SUMMARECON AGUNG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and SUMMARECON AGUNG, you can compare the effects of market volatilities on Microsoft and SUMMARECON AGUNG 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 SUMMARECON AGUNG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and SUMMARECON AGUNG.
Diversification Opportunities for Microsoft and SUMMARECON AGUNG
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Microsoft and SUMMARECON is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and SUMMARECON AGUNG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUMMARECON AGUNG 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 SUMMARECON AGUNG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUMMARECON AGUNG has no effect on the direction of Microsoft i.e., Microsoft and SUMMARECON AGUNG go up and down completely randomly.
Pair Corralation between Microsoft and SUMMARECON AGUNG
Assuming the 90 days trading horizon Microsoft is expected to under-perform the SUMMARECON AGUNG. But the stock apears to be less risky and, when comparing its historical volatility, Microsoft is 3.12 times less risky than SUMMARECON AGUNG. The stock trades about -0.02 of its potential returns per unit of risk. The SUMMARECON AGUNG is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1.80 in SUMMARECON AGUNG on November 2, 2024 and sell it today you would lose (0.10) from holding SUMMARECON AGUNG or give up 5.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. SUMMARECON AGUNG
Performance |
| Timeline |
| Microsoft |
| SUMMARECON AGUNG |
Microsoft and SUMMARECON AGUNG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and SUMMARECON AGUNG
The main advantage of trading using opposite Microsoft and SUMMARECON AGUNG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, SUMMARECON AGUNG 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 SUMMARECON AGUNG will offset losses from the drop in SUMMARECON AGUNG's long position.| Microsoft vs. AEGEAN AIRLINES | Microsoft vs. Southwest Airlines Co | Microsoft vs. THORNEY TECHS LTD | Microsoft vs. HELIOS TECHS INC |
| SUMMARECON AGUNG vs. Direct Line Insurance | SUMMARECON AGUNG vs. Sunstone Hotel Investors | SUMMARECON AGUNG vs. HANOVER INSURANCE | SUMMARECON AGUNG vs. VIENNA INSURANCE GR |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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