Correlation Between Microsoft and Agat Ejendomme
Can any of the company-specific risk be diversified away by investing in both Microsoft and Agat Ejendomme 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 Agat Ejendomme into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Agat Ejendomme AS, you can compare the effects of market volatilities on Microsoft and Agat Ejendomme 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 Agat Ejendomme. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Agat Ejendomme.
Diversification Opportunities for Microsoft and Agat Ejendomme
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Microsoft and Agat is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Agat Ejendomme AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agat Ejendomme AS 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 Agat Ejendomme. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agat Ejendomme AS has no effect on the direction of Microsoft i.e., Microsoft and Agat Ejendomme go up and down completely randomly.
Pair Corralation between Microsoft and Agat Ejendomme
Given the investment horizon of 90 days Microsoft is expected to generate 0.78 times more return on investment than Agat Ejendomme. However, Microsoft is 1.29 times less risky than Agat Ejendomme. It trades about 0.19 of its potential returns per unit of risk. Agat Ejendomme AS is currently generating about -0.32 per unit of risk. If you would invest 40,554 in Microsoft on September 1, 2024 and sell it today you would earn a total of 1,792 from holding Microsoft or generate 4.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Microsoft vs. Agat Ejendomme AS
Performance |
| Timeline |
| Microsoft |
| Agat Ejendomme AS |
Microsoft and Agat Ejendomme Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Agat Ejendomme
The main advantage of trading using opposite Microsoft and Agat Ejendomme positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Agat Ejendomme 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 Agat Ejendomme will offset losses from the drop in Agat Ejendomme's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Agat Ejendomme vs. Cemat AS | Agat Ejendomme vs. Columbus AS | Agat Ejendomme vs. Harboes Bryggeri AS | Agat Ejendomme vs. Copenhagen Capital AS |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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