Correlation Between Microsoft and ELMOS SEMICONDUCTOR
Can any of the company-specific risk be diversified away by investing in both Microsoft and ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and ELMOS SEMICONDUCTOR, you can compare the effects of market volatilities on Microsoft and ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and ELMOS SEMICONDUCTOR.
Diversification Opportunities for Microsoft and ELMOS SEMICONDUCTOR
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microsoft and ELMOS is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and ELMOS SEMICONDUCTOR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELMOS SEMICONDUCTOR has no effect on the direction of Microsoft i.e., Microsoft and ELMOS SEMICONDUCTOR go up and down completely randomly.
Pair Corralation between Microsoft and ELMOS SEMICONDUCTOR
Assuming the 90 days trading horizon Microsoft is expected to generate 0.5 times more return on investment than ELMOS SEMICONDUCTOR. However, Microsoft is 2.0 times less risky than ELMOS SEMICONDUCTOR. It trades about 0.06 of its potential returns per unit of risk. ELMOS SEMICONDUCTOR is currently generating about 0.0 per unit of risk. If you would invest 29,686 in Microsoft on August 31, 2024 and sell it today you would earn a total of 10,324 from holding Microsoft or generate 34.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Microsoft vs. ELMOS SEMICONDUCTOR
Performance |
| Timeline |
| Microsoft |
| ELMOS SEMICONDUCTOR |
Microsoft and ELMOS SEMICONDUCTOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and ELMOS SEMICONDUCTOR
The main advantage of trading using opposite Microsoft and ELMOS SEMICONDUCTOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR will offset losses from the drop in ELMOS SEMICONDUCTOR's long position.| Microsoft vs. Gruppo Mutuionline SpA | Microsoft vs. Air New Zealand | Microsoft vs. Ryanair Holdings plc | Microsoft vs. Salesforce |
| ELMOS SEMICONDUCTOR vs. Treasury Wine Estates | ELMOS SEMICONDUCTOR vs. Spirent Communications plc | ELMOS SEMICONDUCTOR vs. Calibre Mining Corp | ELMOS SEMICONDUCTOR vs. SK TELECOM TDADR |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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