Correlation Between Microsoft and Bera Holding
Can any of the company-specific risk be diversified away by investing in both Microsoft and Bera Holding 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 Bera Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Bera Holding AS, you can compare the effects of market volatilities on Microsoft and Bera Holding 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 Bera Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Bera Holding.
Diversification Opportunities for Microsoft and Bera Holding
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Microsoft and Bera is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Bera Holding AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bera Holding AS 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 Bera Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bera Holding AS has no effect on the direction of Microsoft i.e., Microsoft and Bera Holding go up and down completely randomly.
Pair Corralation between Microsoft and Bera Holding
Given the investment horizon of 90 days Microsoft is expected to generate 0.51 times more return on investment than Bera Holding. However, Microsoft is 1.95 times less risky than Bera Holding. It trades about 0.02 of its potential returns per unit of risk. Bera Holding AS is currently generating about -0.03 per unit of risk. If you would invest 42,240 in Microsoft on September 3, 2024 and sell it today you would earn a total of 858.00 from holding Microsoft or generate 2.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.4% |
| Values | Daily Returns |
Microsoft vs. Bera Holding AS
Performance |
| Timeline |
| Microsoft |
| Bera Holding AS |
Microsoft and Bera Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Bera Holding
The main advantage of trading using opposite Microsoft and Bera Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Bera Holding 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 Bera Holding will offset losses from the drop in Bera Holding's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Bera Holding vs. Gubre Fabrikalari TAS | Bera Holding vs. Deva Holding AS | Bera Holding vs. Dogus Otomotiv Servis | Bera Holding vs. Tekfen Holding AS |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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