Correlation Between Microsoft and Hubei Xingfa
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By analyzing existing cross correlation between Microsoft and Hubei Xingfa Chemicals, you can compare the effects of market volatilities on Microsoft and Hubei Xingfa 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 Xingfa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Hubei Xingfa.
Diversification Opportunities for Microsoft and Hubei Xingfa
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Hubei is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Hubei Xingfa Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Xingfa Chemicals 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 Xingfa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Xingfa Chemicals has no effect on the direction of Microsoft i.e., Microsoft and Hubei Xingfa go up and down completely randomly.
Pair Corralation between Microsoft and Hubei Xingfa
Given the investment horizon of 90 days Microsoft is expected to generate 0.63 times more return on investment than Hubei Xingfa. However, Microsoft is 1.59 times less risky than Hubei Xingfa. It trades about 0.02 of its potential returns per unit of risk. Hubei Xingfa Chemicals 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 Xingfa Chemicals
Performance |
| Timeline |
| Microsoft |
| Hubei Xingfa Chemicals |
Microsoft and Hubei Xingfa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Hubei Xingfa
The main advantage of trading using opposite Microsoft and Hubei Xingfa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Hubei Xingfa 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 Xingfa will offset losses from the drop in Hubei Xingfa's long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Paysafe |
| Hubei Xingfa vs. Zijin Mining Group | Hubei Xingfa vs. Wanhua Chemical Group | Hubei Xingfa vs. Baoshan Iron Steel | Hubei Xingfa vs. Shandong Gold Mining |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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