Correlation Between Microsoft and Auxly Cannabis
Can any of the company-specific risk be diversified away by investing in both Microsoft and Auxly Cannabis 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 Auxly Cannabis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Auxly Cannabis Group, you can compare the effects of market volatilities on Microsoft and Auxly Cannabis 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 Auxly Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Auxly Cannabis.
Diversification Opportunities for Microsoft and Auxly Cannabis
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microsoft and Auxly is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Auxly Cannabis Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auxly Cannabis Group 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 Auxly Cannabis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auxly Cannabis Group has no effect on the direction of Microsoft i.e., Microsoft and Auxly Cannabis go up and down completely randomly.
Pair Corralation between Microsoft and Auxly Cannabis
Given the investment horizon of 90 days Microsoft is expected to generate 58.36 times less return on investment than Auxly Cannabis. But when comparing it to its historical volatility, Microsoft is 26.54 times less risky than Auxly Cannabis. It trades about 0.06 of its potential returns per unit of risk. Auxly Cannabis Group is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 0.85 in Auxly Cannabis Group on September 12, 2024 and sell it today you would earn a total of 0.21 from holding Auxly Cannabis Group or generate 24.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.32% |
| Values | Daily Returns |
Microsoft vs. Auxly Cannabis Group
Performance |
| Timeline |
| Microsoft |
| Auxly Cannabis Group |
Microsoft and Auxly Cannabis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Auxly Cannabis
The main advantage of trading using opposite Microsoft and Auxly Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Auxly Cannabis 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 Auxly Cannabis will offset losses from the drop in Auxly Cannabis' long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Auxly Cannabis vs. Sanyo Chemical Industries | Auxly Cannabis vs. TIANDE CHEMICAL | Auxly Cannabis vs. Charter Communications | Auxly Cannabis vs. Cogent Communications Holdings |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |