Correlation Between Microsoft and Yuanta Global
Can any of the company-specific risk be diversified away by investing in both Microsoft and Yuanta Global 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 and Yuanta Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Yuanta Global NexGen, you can compare the effects of market volatilities on Microsoft and Yuanta Global 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 Yuanta Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Yuanta Global.
Diversification Opportunities for Microsoft and Yuanta Global
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Yuanta is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Yuanta Global NexGen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuanta Global NexGen 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 Yuanta Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuanta Global NexGen has no effect on the direction of Microsoft i.e., Microsoft and Yuanta Global go up and down completely randomly.
Pair Corralation between Microsoft and Yuanta Global
Given the investment horizon of 90 days Microsoft is expected to generate 1.09 times more return on investment than Yuanta Global. However, Microsoft is 1.09 times more volatile than Yuanta Global NexGen. It trades about 0.1 of its potential returns per unit of risk. Yuanta Global NexGen is currently generating about 0.07 per unit of risk. If you would invest 22,345 in Microsoft on August 31, 2024 and sell it today you would earn a total of 20,001 from holding Microsoft or generate 89.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.23% |
| Values | Daily Returns |
Microsoft vs. Yuanta Global NexGen
Performance |
| Timeline |
| Microsoft |
| Yuanta Global NexGen |
Microsoft and Yuanta Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Yuanta Global
The main advantage of trading using opposite Microsoft and Yuanta Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Yuanta Global 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 Yuanta Global will offset losses from the drop in Yuanta Global's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Yuanta Global vs. Yuanta Daily SP | Yuanta Global vs. Yuanta Securities Investment | Yuanta Global vs. Yuanta SP GSCI | Yuanta Global vs. Yuanta SP GSCI |
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 CEOs Directory module to screen CEOs from public companies around the world.
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