Correlation Between Microsoft and Poujoulat
Can any of the company-specific risk be diversified away by investing in both Microsoft and Poujoulat 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 Poujoulat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Poujoulat SA, you can compare the effects of market volatilities on Microsoft and Poujoulat 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 Poujoulat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Poujoulat.
Diversification Opportunities for Microsoft and Poujoulat
Very good diversification
The 3 months correlation between Microsoft and Poujoulat is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Poujoulat SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Poujoulat SA 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 Poujoulat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Poujoulat SA has no effect on the direction of Microsoft i.e., Microsoft and Poujoulat go up and down completely randomly.
Pair Corralation between Microsoft and Poujoulat
Given the investment horizon of 90 days Microsoft is expected to generate 0.94 times more return on investment than Poujoulat. However, Microsoft is 1.06 times less risky than Poujoulat. It trades about 0.02 of its potential returns per unit of risk. Poujoulat SA is currently generating about -0.11 per unit of risk. If you would invest 42,574 in Microsoft on August 29, 2024 and sell it today you would earn a total of 225.00 from holding Microsoft or generate 0.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Poujoulat SA
Performance |
| Timeline |
| Microsoft |
| Poujoulat SA |
Microsoft and Poujoulat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Poujoulat
The main advantage of trading using opposite Microsoft and Poujoulat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Poujoulat 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 Poujoulat will offset losses from the drop in Poujoulat's long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Paysafe |
| Poujoulat vs. Prodways Group SA | Poujoulat vs. Claranova SE | Poujoulat vs. DBV Technologies SA | Poujoulat vs. Manitou BF 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |