Correlation Between Microsoft and CFG BANK
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By analyzing existing cross correlation between Microsoft and CFG BANK, you can compare the effects of market volatilities on Microsoft and CFG BANK 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 CFG BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and CFG BANK.
Diversification Opportunities for Microsoft and CFG BANK
Average diversification
The 3 months correlation between Microsoft and CFG is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and CFG BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CFG BANK 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 CFG BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CFG BANK has no effect on the direction of Microsoft i.e., Microsoft and CFG BANK go up and down completely randomly.
Pair Corralation between Microsoft and CFG BANK
Given the investment horizon of 90 days Microsoft is expected to under-perform the CFG BANK. But the stock apears to be less risky and, when comparing its historical volatility, Microsoft is 1.02 times less risky than CFG BANK. The stock trades about -0.04 of its potential returns per unit of risk. The CFG BANK is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 18,400 in CFG BANK on August 30, 2024 and sell it today you would earn a total of 2,500 from holding CFG BANK or generate 13.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Microsoft vs. CFG BANK
Performance |
| Timeline |
| Microsoft |
| CFG BANK |
Microsoft and CFG BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and CFG BANK
The main advantage of trading using opposite Microsoft and CFG BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, CFG BANK 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 CFG BANK will offset losses from the drop in CFG BANK's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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