Correlation Between Microsoft and Masterwork Machinery
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By analyzing existing cross correlation between Microsoft and Masterwork Machinery, you can compare the effects of market volatilities on Microsoft and Masterwork Machinery 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 Masterwork Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Masterwork Machinery.
Diversification Opportunities for Microsoft and Masterwork Machinery
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Masterwork is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Masterwork Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Masterwork Machinery 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 Masterwork Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Masterwork Machinery has no effect on the direction of Microsoft i.e., Microsoft and Masterwork Machinery go up and down completely randomly.
Pair Corralation between Microsoft and Masterwork Machinery
Given the investment horizon of 90 days Microsoft is expected to generate 13.29 times less return on investment than Masterwork Machinery. But when comparing it to its historical volatility, Microsoft is 3.4 times less risky than Masterwork Machinery. It trades about 0.02 of its potential returns per unit of risk. Masterwork Machinery is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 563.00 in Masterwork Machinery on August 29, 2024 and sell it today you would earn a total of 46.00 from holding Masterwork Machinery or generate 8.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Masterwork Machinery
Performance |
| Timeline |
| Microsoft |
| Masterwork Machinery |
Microsoft and Masterwork Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Masterwork Machinery
The main advantage of trading using opposite Microsoft and Masterwork Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Masterwork Machinery 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 Masterwork Machinery will offset losses from the drop in Masterwork Machinery'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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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