Correlation Between Microsoft and China Molybdenum
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By analyzing existing cross correlation between Microsoft and China Molybdenum Co, you can compare the effects of market volatilities on Microsoft and China Molybdenum 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 Molybdenum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and China Molybdenum.
Diversification Opportunities for Microsoft and China Molybdenum
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microsoft and China is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and China Molybdenum Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Molybdenum 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 Molybdenum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Molybdenum has no effect on the direction of Microsoft i.e., Microsoft and China Molybdenum go up and down completely randomly.
Pair Corralation between Microsoft and China Molybdenum
Given the investment horizon of 90 days Microsoft is expected to generate 0.82 times more return on investment than China Molybdenum. However, Microsoft is 1.21 times less risky than China Molybdenum. It trades about -0.04 of its potential returns per unit of risk. China Molybdenum Co is currently generating about -0.19 per unit of risk. If you would invest 42,574 in Microsoft on August 28, 2024 and sell it today you would lose (695.00) from holding Microsoft or give up 1.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. China Molybdenum Co
Performance |
| Timeline |
| Microsoft |
| China Molybdenum |
Microsoft and China Molybdenum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and China Molybdenum
The main advantage of trading using opposite Microsoft and China Molybdenum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, China Molybdenum 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 Molybdenum will offset losses from the drop in China Molybdenum's long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Paysafe |
| China Molybdenum vs. Anhui Jianghuai Automobile | China Molybdenum vs. Jinhui Liquor Co | China Molybdenum vs. China Publishing Media | China Molybdenum vs. Changchun Faway Automobile |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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