Correlation Between Microsoft and Clever Leaves
Can any of the company-specific risk be diversified away by investing in both Microsoft and Clever Leaves 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 Clever Leaves into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Clever Leaves Holdings, you can compare the effects of market volatilities on Microsoft and Clever Leaves 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 Clever Leaves. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Clever Leaves.
Diversification Opportunities for Microsoft and Clever Leaves
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Clever is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Clever Leaves Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clever Leaves Holdings 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 Clever Leaves. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clever Leaves Holdings has no effect on the direction of Microsoft i.e., Microsoft and Clever Leaves go up and down completely randomly.
Pair Corralation between Microsoft and Clever Leaves
If you would invest 36,640 in Microsoft on August 29, 2024 and sell it today you would earn a total of 5,746 from holding Microsoft or generate 15.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.4% |
| Values | Daily Returns |
Microsoft vs. Clever Leaves Holdings
Performance |
| Timeline |
| Microsoft |
| Clever Leaves Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Microsoft and Clever Leaves Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Clever Leaves
The main advantage of trading using opposite Microsoft and Clever Leaves positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Clever Leaves 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 Clever Leaves will offset losses from the drop in Clever Leaves' long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Clever Leaves vs. Clever Leaves Holdings | Clever Leaves vs. CannBioRx Life Sciences | Clever Leaves vs. Clene Inc | Clever Leaves vs. CuriosityStream |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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