Correlation Between Microsoft and Guangdong Tengen
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By analyzing existing cross correlation between Microsoft and Guangdong Tengen Industrial, you can compare the effects of market volatilities on Microsoft and Guangdong Tengen 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 Guangdong Tengen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Guangdong Tengen.
Diversification Opportunities for Microsoft and Guangdong Tengen
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Microsoft and Guangdong is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Guangdong Tengen Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Tengen Ind 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 Guangdong Tengen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Tengen Ind has no effect on the direction of Microsoft i.e., Microsoft and Guangdong Tengen go up and down completely randomly.
Pair Corralation between Microsoft and Guangdong Tengen
Given the investment horizon of 90 days Microsoft is expected to generate 1.11 times less return on investment than Guangdong Tengen. But when comparing it to its historical volatility, Microsoft is 1.38 times less risky than Guangdong Tengen. It trades about 0.32 of its potential returns per unit of risk. Guangdong Tengen Industrial is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 967.00 in Guangdong Tengen Industrial on September 12, 2024 and sell it today you would earn a total of 85.00 from holding Guangdong Tengen Industrial or generate 8.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Microsoft vs. Guangdong Tengen Industrial
Performance |
| Timeline |
| Microsoft |
| Guangdong Tengen Ind |
Microsoft and Guangdong Tengen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Guangdong Tengen
The main advantage of trading using opposite Microsoft and Guangdong Tengen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Guangdong Tengen 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 Guangdong Tengen will offset losses from the drop in Guangdong Tengen's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Guangdong Tengen vs. Chongqing Shunbo Aluminum | Guangdong Tengen vs. Aluminum Corp of | Guangdong Tengen vs. Guangdong Jingyi Metal | Guangdong Tengen vs. Hefei Metalforming Mach |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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