Correlation Between Microsoft and Carnegie Clean
Can any of the company-specific risk be diversified away by investing in both Microsoft and Carnegie Clean 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 Carnegie Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Carnegie Clean Energy, you can compare the effects of market volatilities on Microsoft and Carnegie Clean 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 Carnegie Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Carnegie Clean.
Diversification Opportunities for Microsoft and Carnegie Clean
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Microsoft and Carnegie is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Carnegie Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carnegie Clean Energy 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 Carnegie Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carnegie Clean Energy has no effect on the direction of Microsoft i.e., Microsoft and Carnegie Clean go up and down completely randomly.
Pair Corralation between Microsoft and Carnegie Clean
Given the investment horizon of 90 days Microsoft is expected to generate 0.27 times more return on investment than Carnegie Clean. However, Microsoft is 3.68 times less risky than Carnegie Clean. It trades about 0.07 of its potential returns per unit of risk. Carnegie Clean Energy is currently generating about -0.03 per unit of risk. If you would invest 37,049 in Microsoft on September 14, 2024 and sell it today you would earn a total of 7,688 from holding Microsoft or generate 20.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.81% |
| Values | Daily Returns |
Microsoft vs. Carnegie Clean Energy
Performance |
| Timeline |
| Microsoft |
| Carnegie Clean Energy |
Microsoft and Carnegie Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Carnegie Clean
The main advantage of trading using opposite Microsoft and Carnegie Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Carnegie Clean 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 Carnegie Clean will offset losses from the drop in Carnegie Clean's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Carnegie Clean vs. Superior Plus Corp | Carnegie Clean vs. SIVERS SEMICONDUCTORS AB | Carnegie Clean vs. Norsk Hydro ASA | Carnegie Clean vs. Reliance Steel Aluminum |
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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