Correlation Between Microsoft and CI Global
Can any of the company-specific risk be diversified away by investing in both Microsoft and CI Global 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 CI Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and CI Global Real, you can compare the effects of market volatilities on Microsoft and CI Global 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 CI Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and CI Global.
Diversification Opportunities for Microsoft and CI Global
Very weak diversification
The 3 months correlation between Microsoft and CGRA is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and CI Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Global Real 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 CI Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Global Real has no effect on the direction of Microsoft i.e., Microsoft and CI Global go up and down completely randomly.
Pair Corralation between Microsoft and CI Global
Given the investment horizon of 90 days Microsoft is expected to under-perform the CI Global. In addition to that, Microsoft is 2.42 times more volatile than CI Global Real. It trades about -0.04 of its total potential returns per unit of risk. CI Global Real is currently generating about 0.16 per unit of volatility. If you would invest 2,261 in CI Global Real on August 31, 2024 and sell it today you would earn a total of 55.00 from holding CI Global Real or generate 2.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Microsoft vs. CI Global Real
Performance |
| Timeline |
| Microsoft |
| CI Global Real |
Microsoft and CI Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and CI Global
The main advantage of trading using opposite Microsoft and CI Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, CI Global 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 CI Global will offset losses from the drop in CI Global's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| CI Global vs. Brompton Global Dividend | CI Global vs. Brompton European Dividend | CI Global vs. Brompton North American | CI Global vs. Global Healthcare Income |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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