Correlation Between Microsoft and Alliance Finance
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By analyzing existing cross correlation between Microsoft and Alliance Finance, you can compare the effects of market volatilities on Microsoft and Alliance Finance 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 Alliance Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Alliance Finance.
Diversification Opportunities for Microsoft and Alliance Finance
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Alliance is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Alliance Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Finance 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 Alliance Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Finance has no effect on the direction of Microsoft i.e., Microsoft and Alliance Finance go up and down completely randomly.
Pair Corralation between Microsoft and Alliance Finance
Given the investment horizon of 90 days Microsoft is expected to under-perform the Alliance Finance. But the stock apears to be less risky and, when comparing its historical volatility, Microsoft is 1.51 times less risky than Alliance Finance. The stock trades about -0.04 of its potential returns per unit of risk. The Alliance Finance is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 11,900 in Alliance Finance on August 30, 2024 and sell it today you would earn a total of 1,125 from holding Alliance Finance or generate 9.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Microsoft vs. Alliance Finance
Performance |
| Timeline |
| Microsoft |
| Alliance Finance |
Microsoft and Alliance Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Alliance Finance
The main advantage of trading using opposite Microsoft and Alliance Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Alliance Finance 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 Alliance Finance will offset losses from the drop in Alliance Finance's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Alliance Finance vs. EX PACK RUGATED CARTONS | Alliance Finance vs. PANASIAN POWER PLC | Alliance Finance vs. Distilleries Company of | Alliance Finance vs. Palm Garden Hotels |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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