Correlation Between Microsoft and Garuda Metalindo
Can any of the company-specific risk be diversified away by investing in both Microsoft and Garuda Metalindo 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 Garuda Metalindo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Garuda Metalindo Tbk, you can compare the effects of market volatilities on Microsoft and Garuda Metalindo 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 Garuda Metalindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Garuda Metalindo.
Diversification Opportunities for Microsoft and Garuda Metalindo
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Microsoft and Garuda is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Garuda Metalindo Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garuda Metalindo Tbk 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 Garuda Metalindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garuda Metalindo Tbk has no effect on the direction of Microsoft i.e., Microsoft and Garuda Metalindo go up and down completely randomly.
Pair Corralation between Microsoft and Garuda Metalindo
Given the investment horizon of 90 days Microsoft is expected to generate 0.68 times more return on investment than Garuda Metalindo. However, Microsoft is 1.48 times less risky than Garuda Metalindo. It trades about 0.02 of its potential returns per unit of risk. Garuda Metalindo Tbk is currently generating about 0.0 per unit of risk. If you would invest 42,574 in Microsoft on August 29, 2024 and sell it today you would earn a total of 225.00 from holding Microsoft or generate 0.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Garuda Metalindo Tbk
Performance |
| Timeline |
| Microsoft |
| Garuda Metalindo Tbk |
Microsoft and Garuda Metalindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Garuda Metalindo
The main advantage of trading using opposite Microsoft and Garuda Metalindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Garuda Metalindo 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 Garuda Metalindo will offset losses from the drop in Garuda Metalindo's long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Paysafe |
| Garuda Metalindo vs. Indo Kordsa Tbk | Garuda Metalindo vs. Indospring Tbk | Garuda Metalindo vs. Kabelindo Murni Tbk | Garuda Metalindo vs. Blue Bird Tbk |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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