Correlation Between Microsoft and Antin IP
Can any of the company-specific risk be diversified away by investing in both Microsoft and Antin IP 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 Antin IP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Antin IP SA, you can compare the effects of market volatilities on Microsoft and Antin IP 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 Antin IP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Antin IP.
Diversification Opportunities for Microsoft and Antin IP
Average diversification
The 3 months correlation between Microsoft and Antin is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Antin IP SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antin IP 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 Antin IP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antin IP SA has no effect on the direction of Microsoft i.e., Microsoft and Antin IP go up and down completely randomly.
Pair Corralation between Microsoft and Antin IP
Given the investment horizon of 90 days Microsoft is expected to generate 0.5 times more return on investment than Antin IP. However, Microsoft is 2.0 times less risky than Antin IP. It trades about 0.05 of its potential returns per unit of risk. Antin IP SA is currently generating about 0.0 per unit of risk. If you would invest 37,145 in Microsoft on September 3, 2024 and sell it today you would earn a total of 5,953 from holding Microsoft or generate 16.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Microsoft vs. Antin IP SA
Performance |
| Timeline |
| Microsoft |
| Antin IP SA |
Microsoft and Antin IP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Antin IP
The main advantage of trading using opposite Microsoft and Antin IP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Antin IP 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 Antin IP will offset losses from the drop in Antin IP's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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