Correlation Between Microsoft and Adcore
Can any of the company-specific risk be diversified away by investing in both Microsoft and Adcore 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 Adcore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Adcore Inc, you can compare the effects of market volatilities on Microsoft and Adcore 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 Adcore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Adcore.
Diversification Opportunities for Microsoft and Adcore
Very good diversification
The 3 months correlation between Microsoft and Adcore is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Adcore Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adcore Inc 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 Adcore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adcore Inc has no effect on the direction of Microsoft i.e., Microsoft and Adcore go up and down completely randomly.
Pair Corralation between Microsoft and Adcore
Given the investment horizon of 90 days Microsoft is expected to generate 0.41 times more return on investment than Adcore. However, Microsoft is 2.44 times less risky than Adcore. It trades about 0.07 of its potential returns per unit of risk. Adcore Inc is currently generating about 0.0 per unit of risk. If you would invest 33,475 in Microsoft on September 3, 2024 and sell it today you would earn a total of 8,871 from holding Microsoft or generate 26.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Adcore Inc
Performance |
| Timeline |
| Microsoft |
| Adcore Inc |
Microsoft and Adcore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Adcore
The main advantage of trading using opposite Microsoft and Adcore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Adcore 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 Adcore will offset losses from the drop in Adcore's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Adcore vs. Wishpond Technologies | Adcore vs. Sangoma Technologies Corp | Adcore vs. Viq Solutions | Adcore vs. Premier Health of |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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