Correlation Between Microsoft Corp and Calfrac Well
Can any of the company-specific risk be diversified away by investing in both Microsoft Corp and Calfrac Well 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 Calfrac Well 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 Calfrac Well Services, you can compare the effects of market volatilities on Microsoft Corp and Calfrac Well 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 Calfrac Well. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft Corp and Calfrac Well.
Diversification Opportunities for Microsoft Corp and Calfrac Well
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Microsoft and Calfrac is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft Corp CDR and Calfrac Well Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calfrac Well Services 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 Calfrac Well. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calfrac Well Services has no effect on the direction of Microsoft Corp i.e., Microsoft Corp and Calfrac Well go up and down completely randomly.
Pair Corralation between Microsoft Corp and Calfrac Well
Assuming the 90 days trading horizon Microsoft Corp CDR is expected to under-perform the Calfrac Well. In addition to that, Microsoft Corp is 1.31 times more volatile than Calfrac Well Services. It trades about -0.25 of its total potential returns per unit of risk. Calfrac Well Services is currently generating about 0.08 per unit of volatility. If you would invest 376.00 in Calfrac Well Services on November 28, 2024 and sell it today you would earn a total of 7.00 from holding Calfrac Well Services or generate 1.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft Corp CDR vs. Calfrac Well Services
Performance |
| Timeline |
| Microsoft Corp CDR |
| Calfrac Well Services |
Microsoft Corp and Calfrac Well Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft Corp and Calfrac Well
The main advantage of trading using opposite Microsoft Corp and Calfrac Well positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft Corp position performs unexpectedly, Calfrac Well 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 Calfrac Well will offset losses from the drop in Calfrac Well's long position.| Microsoft Corp vs. Primaris Retail RE | Microsoft Corp vs. Data Communications Management | Microsoft Corp vs. Network Media Group | Microsoft Corp vs. Brookfield Office Properties |
| Calfrac Well vs. Trican Well Service | Calfrac Well vs. Ensign Energy Services | Calfrac Well vs. Precision Drilling | Calfrac Well vs. Secure Energy Services |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |