Correlation Between Microsoft and Bioter SA
Can any of the company-specific risk be diversified away by investing in both Microsoft and Bioter SA 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 Bioter SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Bioter SA, you can compare the effects of market volatilities on Microsoft and Bioter SA 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 Bioter SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Bioter SA.
Diversification Opportunities for Microsoft and Bioter SA
Average diversification
The 3 months correlation between Microsoft and Bioter is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Bioter SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bioter SA 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 Bioter SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bioter SA has no effect on the direction of Microsoft i.e., Microsoft and Bioter SA go up and down completely randomly.
Pair Corralation between Microsoft and Bioter SA
Given the investment horizon of 90 days Microsoft is expected to generate 0.47 times more return on investment than Bioter SA. However, Microsoft is 2.13 times less risky than Bioter SA. It trades about -0.04 of its potential returns per unit of risk. Bioter SA is currently generating about -0.16 per unit of risk. If you would invest 42,574 in Microsoft on August 28, 2024 and sell it today you would lose (695.00) from holding Microsoft or give up 1.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Microsoft vs. Bioter SA
Performance |
| Timeline |
| Microsoft |
| Bioter SA |
Microsoft and Bioter SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Bioter SA
The main advantage of trading using opposite Microsoft and Bioter SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Bioter SA 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 Bioter SA will offset losses from the drop in Bioter SA's long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Paysafe |
| Bioter SA vs. Avax SA | Bioter SA vs. Ekter SA | Bioter SA vs. Intracom Constructions Societe | Bioter SA vs. Alumil Aluminium Industry |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |