Correlation Between Microsoft and Appgate
Can any of the company-specific risk be diversified away by investing in both Microsoft and Appgate 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 Appgate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Appgate, you can compare the effects of market volatilities on Microsoft and Appgate 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 Appgate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Appgate.
Diversification Opportunities for Microsoft and Appgate
Good diversification
The 3 months correlation between Microsoft and Appgate is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Appgate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appgate 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 Appgate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Appgate has no effect on the direction of Microsoft i.e., Microsoft and Appgate go up and down completely randomly.
Pair Corralation between Microsoft and Appgate
If you would invest 13.00 in Appgate on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Appgate or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 2.33% |
| Values | Daily Returns |
Microsoft vs. Appgate
Performance |
| Timeline |
| Microsoft |
| Appgate |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Microsoft and Appgate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Appgate
The main advantage of trading using opposite Microsoft and Appgate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Appgate 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 Appgate will offset losses from the drop in Appgate's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Appgate vs. Tingo Inc | Appgate vs. Palo Alto Networks | Appgate vs. Palantir Technologies Class | Appgate vs. Arax Holdings Corp |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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