Correlation Between Microsoft and Shinkong Synthetic
Can any of the company-specific risk be diversified away by investing in both Microsoft and Shinkong Synthetic 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 Shinkong Synthetic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Shinkong Synthetic Fiber, you can compare the effects of market volatilities on Microsoft and Shinkong Synthetic 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 Shinkong Synthetic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Shinkong Synthetic.
Diversification Opportunities for Microsoft and Shinkong Synthetic
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Shinkong is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Shinkong Synthetic Fiber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinkong Synthetic Fiber 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 Shinkong Synthetic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinkong Synthetic Fiber has no effect on the direction of Microsoft i.e., Microsoft and Shinkong Synthetic go up and down completely randomly.
Pair Corralation between Microsoft and Shinkong Synthetic
Given the investment horizon of 90 days Microsoft is expected to generate 1.57 times more return on investment than Shinkong Synthetic. However, Microsoft is 1.57 times more volatile than Shinkong Synthetic Fiber. It trades about 0.01 of its potential returns per unit of risk. Shinkong Synthetic Fiber is currently generating about -0.06 per unit of risk. If you would invest 42,717 in Microsoft on August 28, 2024 and sell it today you would earn a total of 82.00 from holding Microsoft or generate 0.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Microsoft vs. Shinkong Synthetic Fiber
Performance |
| Timeline |
| Microsoft |
| Shinkong Synthetic Fiber |
Microsoft and Shinkong Synthetic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Shinkong Synthetic
The main advantage of trading using opposite Microsoft and Shinkong Synthetic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Shinkong Synthetic 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 Shinkong Synthetic will offset losses from the drop in Shinkong Synthetic's long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Paysafe |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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