Correlation Between Microsoft and Camurus AB
Can any of the company-specific risk be diversified away by investing in both Microsoft and Camurus AB 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 Camurus AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Camurus AB, you can compare the effects of market volatilities on Microsoft and Camurus AB 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 Camurus AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Camurus AB.
Diversification Opportunities for Microsoft and Camurus AB
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Camurus is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Camurus AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camurus AB 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 Camurus AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camurus AB has no effect on the direction of Microsoft i.e., Microsoft and Camurus AB go up and down completely randomly.
Pair Corralation between Microsoft and Camurus AB
Given the investment horizon of 90 days Microsoft is expected to generate 0.76 times more return on investment than Camurus AB. However, Microsoft is 1.31 times less risky than Camurus AB. It trades about 0.0 of its potential returns per unit of risk. Camurus AB is currently generating about -0.15 per unit of risk. If you would invest 42,574 in Microsoft on August 29, 2024 and sell it today you would lose (188.00) from holding Microsoft or give up 0.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Camurus AB
Performance |
| Timeline |
| Microsoft |
| Camurus AB |
Microsoft and Camurus AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Camurus AB
The main advantage of trading using opposite Microsoft and Camurus AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Camurus AB 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 Camurus AB will offset losses from the drop in Camurus AB's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Camurus AB vs. BioArctic AB | Camurus AB vs. Oncopeptides AB | Camurus AB vs. Hansa Biopharma AB | Camurus AB vs. Swedish Orphan Biovitrum |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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