Correlation Between Microsoft and Lyxor UCITS
Can any of the company-specific risk be diversified away by investing in both Microsoft and Lyxor UCITS 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 Lyxor UCITS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Lyxor UCITS Daily, you can compare the effects of market volatilities on Microsoft and Lyxor UCITS 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 Lyxor UCITS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Lyxor UCITS.
Diversification Opportunities for Microsoft and Lyxor UCITS
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Microsoft and Lyxor is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Lyxor UCITS Daily in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor UCITS Daily 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 Lyxor UCITS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor UCITS Daily has no effect on the direction of Microsoft i.e., Microsoft and Lyxor UCITS go up and down completely randomly.
Pair Corralation between Microsoft and Lyxor UCITS
Given the investment horizon of 90 days Microsoft is expected to generate 1.27 times more return on investment than Lyxor UCITS. However, Microsoft is 1.27 times more volatile than Lyxor UCITS Daily. It trades about 0.42 of its potential returns per unit of risk. Lyxor UCITS Daily is currently generating about -0.18 per unit of risk. If you would invest 41,493 in Microsoft on September 17, 2024 and sell it today you would earn a total of 3,234 from holding Microsoft or generate 7.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Lyxor UCITS Daily
Performance |
| Timeline |
| Microsoft |
| Lyxor UCITS Daily |
Microsoft and Lyxor UCITS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Lyxor UCITS
The main advantage of trading using opposite Microsoft and Lyxor UCITS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Lyxor UCITS 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 Lyxor UCITS will offset losses from the drop in Lyxor UCITS's long position.| Microsoft vs. Global Blue Group | Microsoft vs. Aurora Mobile | Microsoft vs. Marqeta | Microsoft vs. Nextnav Acquisition Corp |
| Lyxor UCITS vs. Lyxor UCITS Japan | Lyxor UCITS vs. Lyxor UCITS Japan | Lyxor UCITS vs. Lyxor UCITS Stoxx | Lyxor UCITS vs. Amundi CAC 40 |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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