Correlation Between Microsoft and Argosy Research
Can any of the company-specific risk be diversified away by investing in both Microsoft and Argosy Research 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 Argosy Research into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Argosy Research, you can compare the effects of market volatilities on Microsoft and Argosy Research 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 Argosy Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Argosy Research.
Diversification Opportunities for Microsoft and Argosy Research
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Microsoft and Argosy is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Argosy Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argosy Research 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 Argosy Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argosy Research has no effect on the direction of Microsoft i.e., Microsoft and Argosy Research go up and down completely randomly.
Pair Corralation between Microsoft and Argosy Research
Given the investment horizon of 90 days Microsoft is expected to generate 2.21 times less return on investment than Argosy Research. But when comparing it to its historical volatility, Microsoft is 2.1 times less risky than Argosy Research. It trades about 0.05 of its potential returns per unit of risk. Argosy Research is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 10,124 in Argosy Research on August 27, 2024 and sell it today you would earn a total of 5,376 from holding Argosy Research or generate 53.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.12% |
| Values | Daily Returns |
Microsoft vs. Argosy Research
Performance |
| Timeline |
| Microsoft |
| Argosy Research |
Microsoft and Argosy Research Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Argosy Research
The main advantage of trading using opposite Microsoft and Argosy Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Argosy Research 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 Argosy Research will offset losses from the drop in Argosy Research's long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Paysafe |
| Argosy Research vs. Taiwan Steel Union | Argosy Research vs. Universal Vision Biotechnology | Argosy Research vs. Ever Clear Environmental Eng | Argosy Research vs. Yeou Yih Steel |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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