Correlation Between Microsoft and Callinex Mines
Can any of the company-specific risk be diversified away by investing in both Microsoft and Callinex Mines 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 Callinex Mines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Callinex Mines, you can compare the effects of market volatilities on Microsoft and Callinex Mines 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 Callinex Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Callinex Mines.
Diversification Opportunities for Microsoft and Callinex Mines
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microsoft and Callinex is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Callinex Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Callinex Mines 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 Callinex Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Callinex Mines has no effect on the direction of Microsoft i.e., Microsoft and Callinex Mines go up and down completely randomly.
Pair Corralation between Microsoft and Callinex Mines
Given the investment horizon of 90 days Microsoft is expected to generate 0.74 times more return on investment than Callinex Mines. However, Microsoft is 1.36 times less risky than Callinex Mines. It trades about -0.06 of its potential returns per unit of risk. Callinex Mines is currently generating about -0.21 per unit of risk. If you would invest 42,785 in Microsoft on November 5, 2024 and sell it today you would lose (1,279) from holding Microsoft or give up 2.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Callinex Mines
Performance |
| Timeline |
| Microsoft |
| Callinex Mines |
Microsoft and Callinex Mines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Callinex Mines
The main advantage of trading using opposite Microsoft and Callinex Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Callinex Mines 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 Callinex Mines will offset losses from the drop in Callinex Mines' long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Adobe Systems Incorporated | Microsoft vs. Crowdstrike Holdings |
| Callinex Mines vs. West Mining Corp | Callinex Mines vs. Flying Nickel Mining | Callinex Mines vs. Forum Energy Metals | Callinex Mines vs. Jourdan Resources |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |