Correlation Between Microsoft and China Satellite
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By analyzing existing cross correlation between Microsoft and China Satellite Communications, you can compare the effects of market volatilities on Microsoft and China Satellite 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 Satellite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and China Satellite.
Diversification Opportunities for Microsoft and China Satellite
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and China is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and China Satellite Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Satellite Comm 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 Satellite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Satellite Comm has no effect on the direction of Microsoft i.e., Microsoft and China Satellite go up and down completely randomly.
Pair Corralation between Microsoft and China Satellite
Given the investment horizon of 90 days Microsoft is expected to generate 28.78 times less return on investment than China Satellite. But when comparing it to its historical volatility, Microsoft is 3.39 times less risky than China Satellite. It trades about 0.02 of its potential returns per unit of risk. China Satellite Communications is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,483 in China Satellite Communications on August 25, 2024 and sell it today you would earn a total of 634.00 from holding China Satellite Communications or generate 42.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.77% |
| Values | Daily Returns |
Microsoft vs. China Satellite Communications
Performance |
| Timeline |
| Microsoft |
| China Satellite Comm |
Microsoft and China Satellite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and China Satellite
The main advantage of trading using opposite Microsoft and China Satellite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, China Satellite 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 Satellite will offset losses from the drop in China Satellite's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| China Satellite vs. Songz Automobile Air | China Satellite vs. Hainan Mining Co | China Satellite vs. Uroica Mining Safety | China Satellite vs. Guangdong Silvere Sci |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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