Correlation Between Microsoft and Bewhere Holdings
Can any of the company-specific risk be diversified away by investing in both Microsoft and Bewhere Holdings 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 Bewhere Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Bewhere Holdings, you can compare the effects of market volatilities on Microsoft and Bewhere Holdings 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 Bewhere Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Bewhere Holdings.
Diversification Opportunities for Microsoft and Bewhere Holdings
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Bewhere is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Bewhere Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bewhere Holdings 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 Bewhere Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bewhere Holdings has no effect on the direction of Microsoft i.e., Microsoft and Bewhere Holdings go up and down completely randomly.
Pair Corralation between Microsoft and Bewhere Holdings
Given the investment horizon of 90 days Microsoft is expected to under-perform the Bewhere Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Microsoft is 1.18 times less risky than Bewhere Holdings. The stock trades about -0.04 of its potential returns per unit of risk. The Bewhere Holdings is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 70.00 in Bewhere Holdings on November 9, 2024 and sell it today you would lose (1.00) from holding Bewhere Holdings or give up 1.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Microsoft vs. Bewhere Holdings
Performance |
| Timeline |
| Microsoft |
| Bewhere Holdings |
Microsoft and Bewhere Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Bewhere Holdings
The main advantage of trading using opposite Microsoft and Bewhere Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Bewhere Holdings 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 Bewhere Holdings will offset losses from the drop in Bewhere Holdings' long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Adobe Systems Incorporated | Microsoft vs. Crowdstrike Holdings |
| Bewhere Holdings vs. Gatekeeper Systems | Bewhere Holdings vs. Reliq Health Technologies | Bewhere Holdings vs. AirIQ Inc | Bewhere Holdings vs. AnalytixInsight |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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