Correlation Between Microsoft and ConforMIS
Can any of the company-specific risk be diversified away by investing in both Microsoft and ConforMIS 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 ConforMIS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and ConforMIS, you can compare the effects of market volatilities on Microsoft and ConforMIS 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 ConforMIS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and ConforMIS.
Diversification Opportunities for Microsoft and ConforMIS
Very good diversification
The 3 months correlation between Microsoft and ConforMIS is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and ConforMIS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConforMIS 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 ConforMIS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ConforMIS has no effect on the direction of Microsoft i.e., Microsoft and ConforMIS go up and down completely randomly.
Pair Corralation between Microsoft and ConforMIS
If you would invest 40,862 in Microsoft on September 3, 2024 and sell it today you would earn a total of 1,484 from holding Microsoft or generate 3.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 1.56% |
| Values | Daily Returns |
Microsoft vs. ConforMIS
Performance |
| Timeline |
| Microsoft |
| ConforMIS |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Microsoft and ConforMIS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and ConforMIS
The main advantage of trading using opposite Microsoft and ConforMIS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, ConforMIS 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 ConforMIS will offset losses from the drop in ConforMIS's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| ConforMIS vs. Bone Biologics Corp | ConforMIS vs. Tivic Health Systems | ConforMIS vs. Bluejay Diagnostics | ConforMIS vs. Vivos Therapeutics |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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