Correlation Between Microsoft and THERMO FISHER
Can any of the company-specific risk be diversified away by investing in both Microsoft and THERMO FISHER 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 THERMO FISHER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and THERMO FISHER SCIEN, you can compare the effects of market volatilities on Microsoft and THERMO FISHER 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 THERMO FISHER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and THERMO FISHER.
Diversification Opportunities for Microsoft and THERMO FISHER
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Microsoft and THERMO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and THERMO FISHER SCIEN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THERMO FISHER SCIEN 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 THERMO FISHER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THERMO FISHER SCIEN has no effect on the direction of Microsoft i.e., Microsoft and THERMO FISHER go up and down completely randomly.
Pair Corralation between Microsoft and THERMO FISHER
If you would invest 23,557 in Microsoft on August 27, 2024 and sell it today you would earn a total of 16,218 from holding Microsoft or generate 68.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Microsoft vs. THERMO FISHER SCIEN
Performance |
| Timeline |
| Microsoft |
| THERMO FISHER SCIEN |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Microsoft and THERMO FISHER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and THERMO FISHER
The main advantage of trading using opposite Microsoft and THERMO FISHER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, THERMO FISHER 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 THERMO FISHER will offset losses from the drop in THERMO FISHER's long position.| Microsoft vs. ELMOS SEMICONDUCTOR | Microsoft vs. Cogent Communications Holdings | Microsoft vs. Ribbon Communications | Microsoft vs. Computershare Limited |
| THERMO FISHER vs. Eastman Chemical | THERMO FISHER vs. SOUTHWEST AIRLINES | THERMO FISHER vs. United Airlines Holdings | THERMO FISHER vs. Sekisui Chemical Co |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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