Correlation Between Microsoft and Hubei Forbon
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By analyzing existing cross correlation between Microsoft and Hubei Forbon Technology, you can compare the effects of market volatilities on Microsoft and Hubei Forbon 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 Hubei Forbon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Hubei Forbon.
Diversification Opportunities for Microsoft and Hubei Forbon
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Hubei is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Hubei Forbon Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Forbon Technology 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 Hubei Forbon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Forbon Technology has no effect on the direction of Microsoft i.e., Microsoft and Hubei Forbon go up and down completely randomly.
Pair Corralation between Microsoft and Hubei Forbon
Given the investment horizon of 90 days Microsoft is expected to generate 0.63 times more return on investment than Hubei Forbon. However, Microsoft is 1.59 times less risky than Hubei Forbon. It trades about 0.02 of its potential returns per unit of risk. Hubei Forbon Technology is currently generating about 0.0 per unit of risk. If you would invest 42,574 in Microsoft on August 28, 2024 and sell it today you would earn a total of 225.00 from holding Microsoft or generate 0.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Hubei Forbon Technology
Performance |
| Timeline |
| Microsoft |
| Hubei Forbon Technology |
Microsoft and Hubei Forbon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Hubei Forbon
The main advantage of trading using opposite Microsoft and Hubei Forbon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Hubei Forbon 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 Hubei Forbon will offset losses from the drop in Hubei Forbon'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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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