Correlation Between Microsoft and Antibe Therapeutics
Can any of the company-specific risk be diversified away by investing in both Microsoft and Antibe Therapeutics 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 Antibe Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Antibe Therapeutics, you can compare the effects of market volatilities on Microsoft and Antibe Therapeutics 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 Antibe Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Antibe Therapeutics.
Diversification Opportunities for Microsoft and Antibe Therapeutics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Microsoft and Antibe is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Antibe Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antibe Therapeutics 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 Antibe Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antibe Therapeutics has no effect on the direction of Microsoft i.e., Microsoft and Antibe Therapeutics go up and down completely randomly.
Pair Corralation between Microsoft and Antibe Therapeutics
Given the investment horizon of 90 days Microsoft is expected to generate 0.19 times more return on investment than Antibe Therapeutics. However, Microsoft is 5.37 times less risky than Antibe Therapeutics. It trades about 0.06 of its potential returns per unit of risk. Antibe Therapeutics is currently generating about -0.01 per unit of risk. If you would invest 35,317 in Microsoft on September 1, 2024 and sell it today you would earn a total of 7,029 from holding Microsoft or generate 19.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Antibe Therapeutics
Performance |
| Timeline |
| Microsoft |
| Antibe Therapeutics |
Microsoft and Antibe Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Antibe Therapeutics
The main advantage of trading using opposite Microsoft and Antibe Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Antibe Therapeutics 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 Antibe Therapeutics will offset losses from the drop in Antibe Therapeutics' long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Antibe Therapeutics vs. Brainsway | Antibe Therapeutics vs. Venus Concept | Antibe Therapeutics vs. Tactile Systems Technology | Antibe Therapeutics vs. Icecure Medical |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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