Correlation Between Microsoft and GraniteShares Gold
Can any of the company-specific risk be diversified away by investing in both Microsoft and GraniteShares Gold 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 GraniteShares Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and GraniteShares Gold Trust, you can compare the effects of market volatilities on Microsoft and GraniteShares Gold 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 GraniteShares Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and GraniteShares Gold.
Diversification Opportunities for Microsoft and GraniteShares Gold
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Microsoft and GraniteShares is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and GraniteShares Gold Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares Gold Trust 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 GraniteShares Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares Gold Trust has no effect on the direction of Microsoft i.e., Microsoft and GraniteShares Gold go up and down completely randomly.
Pair Corralation between Microsoft and GraniteShares Gold
Given the investment horizon of 90 days Microsoft is expected to generate 4.38 times less return on investment than GraniteShares Gold. In addition to that, Microsoft is 1.26 times more volatile than GraniteShares Gold Trust. It trades about 0.02 of its total potential returns per unit of risk. GraniteShares Gold Trust is currently generating about 0.11 per unit of volatility. If you would invest 2,300 in GraniteShares Gold Trust on September 2, 2024 and sell it today you would earn a total of 325.00 from holding GraniteShares Gold Trust or generate 14.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. GraniteShares Gold Trust
Performance |
| Timeline |
| Microsoft |
| GraniteShares Gold Trust |
Microsoft and GraniteShares Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and GraniteShares Gold
The main advantage of trading using opposite Microsoft and GraniteShares Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, GraniteShares Gold 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 GraniteShares Gold will offset losses from the drop in GraniteShares Gold's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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