Correlation Between Microsoft and Dalian Thermal
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By analyzing existing cross correlation between Microsoft and Dalian Thermal Power, you can compare the effects of market volatilities on Microsoft and Dalian Thermal 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 Dalian Thermal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Dalian Thermal.
Diversification Opportunities for Microsoft and Dalian Thermal
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Dalian is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Dalian Thermal Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalian Thermal Power 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 Dalian Thermal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalian Thermal Power has no effect on the direction of Microsoft i.e., Microsoft and Dalian Thermal go up and down completely randomly.
Pair Corralation between Microsoft and Dalian Thermal
Given the investment horizon of 90 days Microsoft is expected to generate 0.33 times more return on investment than Dalian Thermal. However, Microsoft is 3.03 times less risky than Dalian Thermal. It trades about 0.17 of its potential returns per unit of risk. Dalian Thermal Power is currently generating about 0.05 per unit of risk. If you would invest 40,764 in Microsoft on September 3, 2024 and sell it today you would earn a total of 1,582 from holding Microsoft or generate 3.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Microsoft vs. Dalian Thermal Power
Performance |
| Timeline |
| Microsoft |
| Dalian Thermal Power |
Microsoft and Dalian Thermal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Dalian Thermal
The main advantage of trading using opposite Microsoft and Dalian Thermal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Dalian Thermal 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 Dalian Thermal will offset losses from the drop in Dalian Thermal's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Dalian Thermal vs. Industrial and Commercial | Dalian Thermal vs. Agricultural Bank of | Dalian Thermal vs. China Construction Bank | Dalian Thermal vs. Bank of China |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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