Correlation Between Microsoft and Baloise Swiss
Can any of the company-specific risk be diversified away by investing in both Microsoft and Baloise Swiss 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 Baloise Swiss into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Baloise Swiss Property, you can compare the effects of market volatilities on Microsoft and Baloise Swiss 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 Baloise Swiss. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Baloise Swiss.
Diversification Opportunities for Microsoft and Baloise Swiss
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microsoft and Baloise is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Baloise Swiss Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baloise Swiss Property 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 Baloise Swiss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baloise Swiss Property has no effect on the direction of Microsoft i.e., Microsoft and Baloise Swiss go up and down completely randomly.
Pair Corralation between Microsoft and Baloise Swiss
Given the investment horizon of 90 days Microsoft is expected to under-perform the Baloise Swiss. In addition to that, Microsoft is 2.63 times more volatile than Baloise Swiss Property. It trades about -0.2 of its total potential returns per unit of risk. Baloise Swiss Property is currently generating about -0.04 per unit of volatility. If you would invest 12,720 in Baloise Swiss Property on December 7, 2024 and sell it today you would lose (60.00) from holding Baloise Swiss Property or give up 0.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Microsoft vs. Baloise Swiss Property
Performance |
| Timeline |
| Microsoft |
| Baloise Swiss Property |
Microsoft and Baloise Swiss Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Baloise Swiss
The main advantage of trading using opposite Microsoft and Baloise Swiss positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Baloise Swiss 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 Baloise Swiss will offset losses from the drop in Baloise Swiss' long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Adobe Systems Incorporated | Microsoft vs. Crowdstrike Holdings |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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