Correlation Between Microsoft and Autohellas
Can any of the company-specific risk be diversified away by investing in both Microsoft and Autohellas 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 Autohellas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Autohellas SA, you can compare the effects of market volatilities on Microsoft and Autohellas 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 Autohellas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Autohellas.
Diversification Opportunities for Microsoft and Autohellas
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Microsoft and Autohellas is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Autohellas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autohellas 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 Autohellas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autohellas SA has no effect on the direction of Microsoft i.e., Microsoft and Autohellas go up and down completely randomly.
Pair Corralation between Microsoft and Autohellas
Given the investment horizon of 90 days Microsoft is expected to generate 0.96 times more return on investment than Autohellas. However, Microsoft is 1.05 times less risky than Autohellas. It trades about 0.08 of its potential returns per unit of risk. Autohellas SA is currently generating about 0.06 per unit of risk. If you would invest 24,470 in Microsoft on November 29, 2024 and sell it today you would earn a total of 14,783 from holding Microsoft or generate 60.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Microsoft vs. Autohellas SA
Performance |
| Timeline |
| Microsoft |
| Autohellas SA |
Microsoft and Autohellas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Autohellas
The main advantage of trading using opposite Microsoft and Autohellas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Autohellas 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 Autohellas will offset losses from the drop in Autohellas' long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Adobe Systems Incorporated | Microsoft vs. Crowdstrike Holdings |
| Autohellas vs. U Haul Holding | Autohellas vs. Ryder System | Autohellas vs. McGrath RentCorp | Autohellas vs. Air Lease |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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