Correlation Between Microsoft and Allan Gray
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By analyzing existing cross correlation between Microsoft and Allan Gray , you can compare the effects of market volatilities on Microsoft and Allan Gray 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 Allan Gray. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Allan Gray.
Diversification Opportunities for Microsoft and Allan Gray
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Microsoft and Allan is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Allan Gray in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allan Gray 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 Allan Gray. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allan Gray has no effect on the direction of Microsoft i.e., Microsoft and Allan Gray go up and down completely randomly.
Pair Corralation between Microsoft and Allan Gray
Given the investment horizon of 90 days Microsoft is expected to under-perform the Allan Gray. In addition to that, Microsoft is 1.03 times more volatile than Allan Gray . It trades about -0.08 of its total potential returns per unit of risk. Allan Gray is currently generating about 0.15 per unit of volatility. If you would invest 13,501 in Allan Gray on October 21, 2024 and sell it today you would earn a total of 398.00 from holding Allan Gray or generate 2.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Allan Gray
Performance |
| Timeline |
| Microsoft |
| Allan Gray |
Microsoft and Allan Gray Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Allan Gray
The main advantage of trading using opposite Microsoft and Allan Gray positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Allan Gray 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 Allan Gray will offset losses from the drop in Allan Gray's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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