Correlation Between Microsoft and HEXINDO ADIPERKASA
Can any of the company-specific risk be diversified away by investing in both Microsoft and HEXINDO ADIPERKASA 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 HEXINDO ADIPERKASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and HEXINDO ADIPERKASA, you can compare the effects of market volatilities on Microsoft and HEXINDO ADIPERKASA 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 HEXINDO ADIPERKASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and HEXINDO ADIPERKASA.
Diversification Opportunities for Microsoft and HEXINDO ADIPERKASA
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Microsoft and HEXINDO is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and HEXINDO ADIPERKASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEXINDO ADIPERKASA 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 HEXINDO ADIPERKASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEXINDO ADIPERKASA has no effect on the direction of Microsoft i.e., Microsoft and HEXINDO ADIPERKASA go up and down completely randomly.
Pair Corralation between Microsoft and HEXINDO ADIPERKASA
Assuming the 90 days trading horizon Microsoft is expected to generate 1.11 times more return on investment than HEXINDO ADIPERKASA. However, Microsoft is 1.11 times more volatile than HEXINDO ADIPERKASA. It trades about 0.01 of its potential returns per unit of risk. HEXINDO ADIPERKASA is currently generating about -0.35 per unit of risk. If you would invest 39,991 in Microsoft on August 31, 2024 and sell it today you would earn a total of 19.00 from holding Microsoft or generate 0.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. HEXINDO ADIPERKASA
Performance |
| Timeline |
| Microsoft |
| HEXINDO ADIPERKASA |
Microsoft and HEXINDO ADIPERKASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and HEXINDO ADIPERKASA
The main advantage of trading using opposite Microsoft and HEXINDO ADIPERKASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, HEXINDO ADIPERKASA 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 HEXINDO ADIPERKASA will offset losses from the drop in HEXINDO ADIPERKASA's long position.| Microsoft vs. Gruppo Mutuionline SpA | Microsoft vs. Air New Zealand | Microsoft vs. Ryanair Holdings plc | Microsoft vs. Salesforce |
| HEXINDO ADIPERKASA vs. SIVERS SEMICONDUCTORS AB | HEXINDO ADIPERKASA vs. Darden Restaurants | HEXINDO ADIPERKASA vs. Reliance Steel Aluminum | HEXINDO ADIPERKASA vs. Q2M Managementberatung AG |
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.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |