Correlation Between Microsoft and BTG Hotels
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By analyzing existing cross correlation between Microsoft and BTG Hotels Group, you can compare the effects of market volatilities on Microsoft and BTG Hotels 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 BTG Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and BTG Hotels.
Diversification Opportunities for Microsoft and BTG Hotels
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and BTG is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and BTG Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTG Hotels 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 BTG Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTG Hotels Group has no effect on the direction of Microsoft i.e., Microsoft and BTG Hotels go up and down completely randomly.
Pair Corralation between Microsoft and BTG Hotels
Given the investment horizon of 90 days Microsoft is expected to generate 1.7 times less return on investment than BTG Hotels. But when comparing it to its historical volatility, Microsoft is 1.04 times less risky than BTG Hotels. It trades about 0.02 of its potential returns per unit of risk. BTG Hotels Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,429 in BTG Hotels Group on August 29, 2024 and sell it today you would earn a total of 16.00 from holding BTG Hotels Group or generate 1.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. BTG Hotels Group
Performance |
| Timeline |
| Microsoft |
| BTG Hotels Group |
Microsoft and BTG Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and BTG Hotels
The main advantage of trading using opposite Microsoft and BTG Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, BTG Hotels 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 BTG Hotels will offset losses from the drop in BTG Hotels' 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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