Correlation Between Microsoft and Advanced Technology
Specify exactly 2 symbols:
By analyzing existing cross correlation between Microsoft and Advanced Technology Materials, you can compare the effects of market volatilities on Microsoft and Advanced 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 with a short position of Advanced Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Advanced Technology.
Diversification Opportunities for Microsoft and Advanced Technology
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Advanced is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Advanced Technology Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Technology 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 Advanced Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Technology has no effect on the direction of Microsoft i.e., Microsoft and Advanced Technology go up and down completely randomly.
Pair Corralation between Microsoft and Advanced Technology
Given the investment horizon of 90 days Microsoft is expected to generate 2.96 times less return on investment than Advanced Technology. But when comparing it to its historical volatility, Microsoft is 3.79 times less risky than Advanced Technology. It trades about 0.19 of its potential returns per unit of risk. Advanced Technology Materials is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,085 in Advanced Technology Materials on September 1, 2024 and sell it today you would earn a total of 136.00 from holding Advanced Technology Materials or generate 12.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Microsoft vs. Advanced Technology Materials
Performance |
| Timeline |
| Microsoft |
| Advanced Technology |
Microsoft and Advanced Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Advanced Technology
The main advantage of trading using opposite Microsoft and Advanced Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Advanced 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 Advanced Technology will offset losses from the drop in Advanced Technology's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |