Correlation Between Microsoft Corp and Ascot Resources
Can any of the company-specific risk be diversified away by investing in both Microsoft Corp and Ascot Resources 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 Corp and Ascot Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft Corp CDR and Ascot Resources, you can compare the effects of market volatilities on Microsoft Corp and Ascot Resources 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 Corp with a short position of Ascot Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft Corp and Ascot Resources.
Diversification Opportunities for Microsoft Corp and Ascot Resources
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microsoft and Ascot is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft Corp CDR and Ascot Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascot Resources and Microsoft Corp 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 Corp CDR are associated (or correlated) with Ascot Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascot Resources has no effect on the direction of Microsoft Corp i.e., Microsoft Corp and Ascot Resources go up and down completely randomly.
Pair Corralation between Microsoft Corp and Ascot Resources
Assuming the 90 days trading horizon Microsoft Corp CDR is expected to generate 0.17 times more return on investment than Ascot Resources. However, Microsoft Corp CDR is 5.91 times less risky than Ascot Resources. It trades about 0.0 of its potential returns per unit of risk. Ascot Resources is currently generating about -0.06 per unit of risk. If you would invest 3,119 in Microsoft Corp CDR on September 3, 2024 and sell it today you would lose (29.00) from holding Microsoft Corp CDR or give up 0.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft Corp CDR vs. Ascot Resources
Performance |
| Timeline |
| Microsoft Corp CDR |
| Ascot Resources |
Microsoft Corp and Ascot Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft Corp and Ascot Resources
The main advantage of trading using opposite Microsoft Corp and Ascot Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft Corp position performs unexpectedly, Ascot Resources 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 Ascot Resources will offset losses from the drop in Ascot Resources' long position.| Microsoft Corp vs. Enghouse Systems | Microsoft Corp vs. Pulse Seismic | Microsoft Corp vs. Harvest Global REIT | Microsoft Corp vs. International Zeolite Corp |
| Ascot Resources vs. High Liner Foods | Ascot Resources vs. QC Copper and | Ascot Resources vs. Slate Grocery REIT | Ascot Resources vs. Diamond Estates Wines |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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