Correlation Between Microsoft and China Everbright
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By analyzing existing cross correlation between Microsoft and China Everbright Bank, you can compare the effects of market volatilities on Microsoft and China Everbright 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 Everbright. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and China Everbright.
Diversification Opportunities for Microsoft and China Everbright
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microsoft and China is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and China Everbright Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Everbright Bank 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 Everbright. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Everbright Bank has no effect on the direction of Microsoft i.e., Microsoft and China Everbright go up and down completely randomly.
Pair Corralation between Microsoft and China Everbright
Given the investment horizon of 90 days Microsoft is expected to generate 1.93 times less return on investment than China Everbright. But when comparing it to its historical volatility, Microsoft is 1.17 times less risky than China Everbright. It trades about 0.03 of its potential returns per unit of risk. China Everbright Bank is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 315.00 in China Everbright Bank on August 28, 2024 and sell it today you would earn a total of 39.00 from holding China Everbright Bank or generate 12.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 93.78% |
| Values | Daily Returns |
Microsoft vs. China Everbright Bank
Performance |
| Timeline |
| Microsoft |
| China Everbright Bank |
Microsoft and China Everbright Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and China Everbright
The main advantage of trading using opposite Microsoft and China Everbright positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, China Everbright 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 Everbright will offset losses from the drop in China Everbright's long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Paysafe |
| China Everbright vs. Agricultural Bank of | China Everbright vs. Industrial and Commercial | China Everbright vs. Bank of China | China Everbright vs. China Construction Bank |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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