Correlation Between Microsoft and Asia Media
Can any of the company-specific risk be diversified away by investing in both Microsoft and Asia Media 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 Asia Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Asia Media Group, you can compare the effects of market volatilities on Microsoft and Asia Media 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 Asia Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Asia Media.
Diversification Opportunities for Microsoft and Asia Media
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Microsoft and Asia is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Asia Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Media Group 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 Asia Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Media Group has no effect on the direction of Microsoft i.e., Microsoft and Asia Media go up and down completely randomly.
Pair Corralation between Microsoft and Asia Media
Given the investment horizon of 90 days Microsoft is expected to generate 0.25 times more return on investment than Asia Media. However, Microsoft is 4.02 times less risky than Asia Media. It trades about 0.08 of its potential returns per unit of risk. Asia Media Group is currently generating about 0.0 per unit of risk. If you would invest 24,042 in Microsoft on August 28, 2024 and sell it today you would earn a total of 17,837 from holding Microsoft or generate 74.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.58% |
| Values | Daily Returns |
Microsoft vs. Asia Media Group
Performance |
| Timeline |
| Microsoft |
| Asia Media Group |
Microsoft and Asia Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Asia Media
The main advantage of trading using opposite Microsoft and Asia Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Asia Media 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 Asia Media will offset losses from the drop in Asia Media's long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Paysafe |
| Asia Media vs. Apex Healthcare Bhd | Asia Media vs. Computer Forms Bhd | Asia Media vs. Malayan Banking Bhd | Asia Media vs. RHB Bank Bhd |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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