Correlation Between Microsoft and Bank Mestika
Can any of the company-specific risk be diversified away by investing in both Microsoft and Bank Mestika 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 Bank Mestika into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Bank Mestika Dharma, you can compare the effects of market volatilities on Microsoft and Bank Mestika 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 Bank Mestika. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Bank Mestika.
Diversification Opportunities for Microsoft and Bank Mestika
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Bank is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Bank Mestika Dharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Mestika Dharma 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 Bank Mestika. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Mestika Dharma has no effect on the direction of Microsoft i.e., Microsoft and Bank Mestika go up and down completely randomly.
Pair Corralation between Microsoft and Bank Mestika
Given the investment horizon of 90 days Microsoft is expected to generate 0.56 times more return on investment than Bank Mestika. However, Microsoft is 1.78 times less risky than Bank Mestika. It trades about 0.19 of its potential returns per unit of risk. Bank Mestika Dharma is currently generating about 0.09 per unit of risk. If you would invest 40,554 in Microsoft on September 1, 2024 and sell it today you would earn a total of 1,792 from holding Microsoft or generate 4.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Microsoft vs. Bank Mestika Dharma
Performance |
| Timeline |
| Microsoft |
| Bank Mestika Dharma |
Microsoft and Bank Mestika Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Bank Mestika
The main advantage of trading using opposite Microsoft and Bank Mestika positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Bank Mestika 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 Bank Mestika will offset losses from the drop in Bank Mestika's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Bank Mestika vs. Bank Maspion Indonesia | Bank Mestika vs. Bank Sinarmas Tbk | Bank Mestika vs. Bank Ina Perdana | Bank Mestika vs. Bank Bumi Arta |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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