Correlation Between Microsoft and Bawat Water
Can any of the company-specific risk be diversified away by investing in both Microsoft and Bawat Water 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 Bawat Water into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Bawat Water Technologies, you can compare the effects of market volatilities on Microsoft and Bawat Water 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 Bawat Water. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Bawat Water.
Diversification Opportunities for Microsoft and Bawat Water
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Microsoft and Bawat is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Bawat Water Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bawat Water Technologies 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 Bawat Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bawat Water Technologies has no effect on the direction of Microsoft i.e., Microsoft and Bawat Water go up and down completely randomly.
Pair Corralation between Microsoft and Bawat Water
Given the investment horizon of 90 days Microsoft is expected to generate 0.26 times more return on investment than Bawat Water. However, Microsoft is 3.8 times less risky than Bawat Water. It trades about -0.21 of its potential returns per unit of risk. Bawat Water Technologies is currently generating about -0.13 per unit of risk. If you would invest 41,416 in Microsoft on December 1, 2024 and sell it today you would lose (1,717) from holding Microsoft or give up 4.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Microsoft vs. Bawat Water Technologies
Performance |
| Timeline |
| Microsoft |
| Bawat Water Technologies |
Microsoft and Bawat Water Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Bawat Water
The main advantage of trading using opposite Microsoft and Bawat Water positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Bawat Water 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 Bawat Water will offset losses from the drop in Bawat Water's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Adobe Systems Incorporated | Microsoft vs. Crowdstrike Holdings |
| Bawat Water vs. Systemair AB | Bawat Water vs. Invisio Communications AB | Bawat Water vs. Nordic Iron Ore | Bawat Water vs. Investment AB Oresund |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |