Correlation Between Microsoft and Agritek Holdings
Can any of the company-specific risk be diversified away by investing in both Microsoft and Agritek Holdings 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 Agritek Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Agritek Holdings, you can compare the effects of market volatilities on Microsoft and Agritek Holdings 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 Agritek Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Agritek Holdings.
Diversification Opportunities for Microsoft and Agritek Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Microsoft and Agritek is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Agritek Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agritek Holdings 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 Agritek Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agritek Holdings has no effect on the direction of Microsoft i.e., Microsoft and Agritek Holdings go up and down completely randomly.
Pair Corralation between Microsoft and Agritek Holdings
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 | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Agritek Holdings
Performance |
| Timeline |
| Microsoft |
| Agritek Holdings |
Microsoft and Agritek Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Agritek Holdings
The main advantage of trading using opposite Microsoft and Agritek Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Agritek Holdings 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 Agritek Holdings will offset losses from the drop in Agritek Holdings' long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Agritek Holdings vs. Asia Pptys | Agritek Holdings vs. Aztec Land Comb | Agritek Holdings vs. Ambase Corp | Agritek Holdings vs. Aroundtown SA |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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