Correlation Between Microsoft and HYBRIGENICS
Can any of the company-specific risk be diversified away by investing in both Microsoft and HYBRIGENICS 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 HYBRIGENICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and HYBRIGENICS A , you can compare the effects of market volatilities on Microsoft and HYBRIGENICS 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 HYBRIGENICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and HYBRIGENICS.
Diversification Opportunities for Microsoft and HYBRIGENICS
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Microsoft and HYBRIGENICS is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and HYBRIGENICS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYBRIGENICS A 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 HYBRIGENICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYBRIGENICS A has no effect on the direction of Microsoft i.e., Microsoft and HYBRIGENICS go up and down completely randomly.
Pair Corralation between Microsoft and HYBRIGENICS
Assuming the 90 days trading horizon Microsoft is expected to generate 0.14 times more return on investment than HYBRIGENICS. However, Microsoft is 6.95 times less risky than HYBRIGENICS. It trades about 0.08 of its potential returns per unit of risk. HYBRIGENICS A is currently generating about -0.01 per unit of risk. If you would invest 27,552 in Microsoft on August 31, 2024 and sell it today you would earn a total of 12,458 from holding Microsoft or generate 45.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.75% |
| Values | Daily Returns |
Microsoft vs. HYBRIGENICS A
Performance |
| Timeline |
| Microsoft |
| HYBRIGENICS A |
Microsoft and HYBRIGENICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and HYBRIGENICS
The main advantage of trading using opposite Microsoft and HYBRIGENICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, HYBRIGENICS 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 HYBRIGENICS will offset losses from the drop in HYBRIGENICS's long position.| Microsoft vs. Gruppo Mutuionline SpA | Microsoft vs. Air New Zealand | Microsoft vs. Ryanair Holdings plc | Microsoft vs. Salesforce |
| HYBRIGENICS vs. PLAY2CHILL SA ZY | HYBRIGENICS vs. LG Display Co | HYBRIGENICS vs. Ming Le Sports | HYBRIGENICS vs. PLAYTIKA HOLDING DL 01 |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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