Correlation Between Microsoft and China Enterprise
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By analyzing existing cross correlation between Microsoft and China Enterprise Co, you can compare the effects of market volatilities on Microsoft and China Enterprise 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 China Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and China Enterprise.
Diversification Opportunities for Microsoft and China Enterprise
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Microsoft and China is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and China Enterprise Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Enterprise 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 China Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Enterprise has no effect on the direction of Microsoft i.e., Microsoft and China Enterprise go up and down completely randomly.
Pair Corralation between Microsoft and China Enterprise
Given the investment horizon of 90 days Microsoft is expected to generate 0.41 times more return on investment than China Enterprise. However, Microsoft is 2.42 times less risky than China Enterprise. It trades about 0.07 of its potential returns per unit of risk. China Enterprise Co is currently generating about -0.04 per unit of risk. If you would invest 42,346 in Microsoft on September 29, 2024 and sell it today you would earn a total of 707.00 from holding Microsoft or generate 1.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Microsoft vs. China Enterprise Co
Performance |
| Timeline |
| Microsoft |
| China Enterprise |
Microsoft and China Enterprise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and China Enterprise
The main advantage of trading using opposite Microsoft and China Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, China Enterprise 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 China Enterprise will offset losses from the drop in China Enterprise's long position.| Microsoft vs. Global Blue Group | Microsoft vs. Aurora Mobile | Microsoft vs. Marqeta | Microsoft vs. Nextnav Acquisition Corp |
| China Enterprise vs. Tongyu Communication | China Enterprise vs. Miracll Chemicals Co | China Enterprise vs. Fiberhome Telecommunication Technologies | China Enterprise vs. SUNSEA Telecommunications Co |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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