Correlation Between Microsoft and China Union
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By analyzing existing cross correlation between Microsoft and China Union Holdings, you can compare the effects of market volatilities on Microsoft and China Union 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 China Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and China Union.
Diversification Opportunities for Microsoft and China Union
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and China is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and China Union Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Union Holdings 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 China Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Union Holdings has no effect on the direction of Microsoft i.e., Microsoft and China Union go up and down completely randomly.
Pair Corralation between Microsoft and China Union
Given the investment horizon of 90 days Microsoft is expected to generate 0.61 times more return on investment than China Union. However, Microsoft is 1.64 times less risky than China Union. It trades about 0.09 of its potential returns per unit of risk. China Union Holdings is currently generating about 0.0 per unit of risk. If you would invest 23,813 in Microsoft on October 15, 2024 and sell it today you would earn a total of 18,082 from holding Microsoft or generate 75.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.57% |
| Values | Daily Returns |
Microsoft vs. China Union Holdings
Performance |
| Timeline |
| Microsoft |
| China Union Holdings |
Microsoft and China Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and China Union
The main advantage of trading using opposite Microsoft and China Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, China Union 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 China Union will offset losses from the drop in China Union's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| China Union vs. Hua Xia Bank | China Union vs. Postal Savings Bank | China Union vs. Unisplendour Corp | China Union vs. Bomesc Offshore Engineering |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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