Correlation Between Microsoft and Celularity
Can any of the company-specific risk be diversified away by investing in both Microsoft and Celularity 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 Celularity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Celularity, you can compare the effects of market volatilities on Microsoft and Celularity 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 Celularity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Celularity.
Diversification Opportunities for Microsoft and Celularity
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microsoft and Celularity is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Celularity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celularity 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 Celularity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celularity has no effect on the direction of Microsoft i.e., Microsoft and Celularity go up and down completely randomly.
Pair Corralation between Microsoft and Celularity
Given the investment horizon of 90 days Microsoft is expected to under-perform the Celularity. But the stock apears to be less risky and, when comparing its historical volatility, Microsoft is 12.14 times less risky than Celularity. The stock trades about 0.0 of its potential returns per unit of risk. The Celularity is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1.88 in Celularity on August 29, 2024 and sell it today you would lose (0.31) from holding Celularity or give up 16.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 86.96% |
| Values | Daily Returns |
Microsoft vs. Celularity
Performance |
| Timeline |
| Microsoft |
| Celularity |
Microsoft and Celularity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Celularity
The main advantage of trading using opposite Microsoft and Celularity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Celularity 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 Celularity will offset losses from the drop in Celularity's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Celularity vs. Bright Minds Biosciences | Celularity vs. HP Inc | Celularity vs. Intel | Celularity vs. Chevron 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |