Correlation Between Microsoft and An Phat
Can any of the company-specific risk be diversified away by investing in both Microsoft and An Phat at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Microsoft and An Phat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and An Phat Plastic, you can compare the effects of market volatilities on Microsoft and An Phat 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 An Phat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and An Phat.
Diversification Opportunities for Microsoft and An Phat
Significant diversification
The 3 months correlation between Microsoft and AAA is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and An Phat Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on An Phat Plastic 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 An Phat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of An Phat Plastic has no effect on the direction of Microsoft i.e., Microsoft and An Phat go up and down completely randomly.
Pair Corralation between Microsoft and An Phat
Given the investment horizon of 90 days Microsoft is expected to generate 0.95 times more return on investment than An Phat. However, Microsoft is 1.06 times less risky than An Phat. It trades about -0.04 of its potential returns per unit of risk. An Phat Plastic is currently generating about -0.1 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. An Phat Plastic
Performance |
| Timeline |
| Microsoft |
| An Phat Plastic |
Microsoft and An Phat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and An Phat
The main advantage of trading using opposite Microsoft and An Phat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, An Phat 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 An Phat will offset losses from the drop in An Phat's long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Paysafe |
| An Phat vs. FIT INVEST JSC | An Phat vs. Damsan JSC | An Phat vs. APG Securities Joint | An Phat vs. Binhthuan Agriculture Services |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |