Correlation Between Microsoft and MHP Hotel
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By analyzing existing cross correlation between Microsoft and MHP Hotel AG, you can compare the effects of market volatilities on Microsoft and MHP Hotel 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 MHP Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and MHP Hotel.
Diversification Opportunities for Microsoft and MHP Hotel
Good diversification
The 3 months correlation between Microsoft and MHP is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and MHP Hotel AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MHP Hotel AG 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 MHP Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MHP Hotel AG has no effect on the direction of Microsoft i.e., Microsoft and MHP Hotel go up and down completely randomly.
Pair Corralation between Microsoft and MHP Hotel
Given the investment horizon of 90 days Microsoft is expected to generate 0.58 times more return on investment than MHP Hotel. However, Microsoft is 1.73 times less risky than MHP Hotel. It trades about 0.06 of its potential returns per unit of risk. MHP Hotel AG is currently generating about 0.0 per unit of risk. If you would invest 32,151 in Microsoft on August 31, 2024 and sell it today you would earn a total of 10,195 from holding Microsoft or generate 31.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.42% |
| Values | Daily Returns |
Microsoft vs. MHP Hotel AG
Performance |
| Timeline |
| Microsoft |
| MHP Hotel AG |
Microsoft and MHP Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and MHP Hotel
The main advantage of trading using opposite Microsoft and MHP Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, MHP Hotel 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 MHP Hotel will offset losses from the drop in MHP Hotel's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| MHP Hotel vs. LODESTAR MIN | MHP Hotel vs. Impinj Inc | MHP Hotel vs. Impinj Inc | MHP Hotel vs. Superior Plus Corp |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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