Correlation Between Microsoft and Shin Kong
Can any of the company-specific risk be diversified away by investing in both Microsoft and Shin Kong 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 Shin Kong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Shin Kong Financial, you can compare the effects of market volatilities on Microsoft and Shin Kong 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 Shin Kong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Shin Kong.
Diversification Opportunities for Microsoft and Shin Kong
Excellent diversification
The 3 months correlation between Microsoft and Shin is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Shin Kong Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Kong Financial 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 Shin Kong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Kong Financial has no effect on the direction of Microsoft i.e., Microsoft and Shin Kong go up and down completely randomly.
Pair Corralation between Microsoft and Shin Kong
Given the investment horizon of 90 days Microsoft is expected to under-perform the Shin Kong. In addition to that, Microsoft is 3.76 times more volatile than Shin Kong Financial. It trades about -0.21 of its total potential returns per unit of risk. Shin Kong Financial is currently generating about 0.43 per unit of volatility. If you would invest 3,740 in Shin Kong Financial on December 1, 2024 and sell it today you would earn a total of 80.00 from holding Shin Kong Financial or generate 2.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Microsoft vs. Shin Kong Financial
Performance |
| Timeline |
| Microsoft |
| Shin Kong Financial |
Microsoft and Shin Kong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Shin Kong
The main advantage of trading using opposite Microsoft and Shin Kong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Shin Kong 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 Shin Kong will offset losses from the drop in Shin Kong's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Adobe Systems Incorporated | Microsoft vs. Crowdstrike Holdings |
| Shin Kong vs. Loop Telecommunication International | Shin Kong vs. Datavan International | Shin Kong vs. Syscom Computer Engineering | Shin Kong vs. AVer Information |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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