Correlation Between Microsoft and Cambiar Smid
Can any of the company-specific risk be diversified away by investing in both Microsoft and Cambiar Smid 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 Cambiar Smid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Cambiar Smid Fund, you can compare the effects of market volatilities on Microsoft and Cambiar Smid 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 Cambiar Smid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Cambiar Smid.
Diversification Opportunities for Microsoft and Cambiar Smid
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Microsoft and Cambiar is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Cambiar Smid Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambiar Smid 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 Cambiar Smid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambiar Smid has no effect on the direction of Microsoft i.e., Microsoft and Cambiar Smid go up and down completely randomly.
Pair Corralation between Microsoft and Cambiar Smid
Given the investment horizon of 90 days Microsoft is expected to under-perform the Cambiar Smid. In addition to that, Microsoft is 1.68 times more volatile than Cambiar Smid Fund. It trades about -0.06 of its total potential returns per unit of risk. Cambiar Smid Fund is currently generating about 0.15 per unit of volatility. If you would invest 2,484 in Cambiar Smid Fund on August 26, 2024 and sell it today you would earn a total of 80.00 from holding Cambiar Smid Fund or generate 3.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Cambiar Smid Fund
Performance |
| Timeline |
| Microsoft |
| Cambiar Smid |
Microsoft and Cambiar Smid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Cambiar Smid
The main advantage of trading using opposite Microsoft and Cambiar Smid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Cambiar Smid 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 Cambiar Smid will offset losses from the drop in Cambiar Smid's long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Rapid7 Inc |
| Cambiar Smid vs. Abr 7525 Volatility | Cambiar Smid vs. Acm Dynamic Opportunity | Cambiar Smid vs. Western Asset Municipal | Cambiar Smid vs. Qs Large Cap |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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