Correlation Between Microsoft Corp and Katipult Technology
Can any of the company-specific risk be diversified away by investing in both Microsoft Corp and Katipult Technology 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 Katipult Technology 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 Katipult Technology Corp, you can compare the effects of market volatilities on Microsoft Corp and Katipult Technology 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 Katipult Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft Corp and Katipult Technology.
Diversification Opportunities for Microsoft Corp and Katipult Technology
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Katipult is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft Corp CDR and Katipult Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Katipult Technology Corp 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 Katipult Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Katipult Technology Corp has no effect on the direction of Microsoft Corp i.e., Microsoft Corp and Katipult Technology go up and down completely randomly.
Pair Corralation between Microsoft Corp and Katipult Technology
Assuming the 90 days trading horizon Microsoft Corp CDR is expected to generate 0.05 times more return on investment than Katipult Technology. However, Microsoft Corp CDR is 20.72 times less risky than Katipult Technology. It trades about 0.26 of its potential returns per unit of risk. Katipult Technology Corp is currently generating about -0.04 per unit of risk. If you would invest 3,052 in Microsoft Corp CDR on September 12, 2024 and sell it today you would earn a total of 184.00 from holding Microsoft Corp CDR or generate 6.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft Corp CDR vs. Katipult Technology Corp
Performance |
| Timeline |
| Microsoft Corp CDR |
| Katipult Technology Corp |
Microsoft Corp and Katipult Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft Corp and Katipult Technology
The main advantage of trading using opposite Microsoft Corp and Katipult Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft Corp position performs unexpectedly, Katipult Technology 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 Katipult Technology will offset losses from the drop in Katipult Technology's long position.| Microsoft Corp vs. Apple Inc CDR | Microsoft Corp vs. NVIDIA CDR | Microsoft Corp vs. Amazon CDR | Microsoft Corp vs. Alphabet Inc CDR |
| Katipult Technology vs. Apple Inc CDR | Katipult Technology vs. NVIDIA CDR | Katipult Technology vs. Microsoft Corp CDR | Katipult Technology vs. Amazon CDR |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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