Correlation Between Microsoft and Chumporn Palm
Can any of the company-specific risk be diversified away by investing in both Microsoft and Chumporn Palm 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 Chumporn Palm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Chumporn Palm Oil, you can compare the effects of market volatilities on Microsoft and Chumporn Palm 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 Chumporn Palm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Chumporn Palm.
Diversification Opportunities for Microsoft and Chumporn Palm
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microsoft and Chumporn is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Chumporn Palm Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chumporn Palm Oil 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 Chumporn Palm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chumporn Palm Oil has no effect on the direction of Microsoft i.e., Microsoft and Chumporn Palm go up and down completely randomly.
Pair Corralation between Microsoft and Chumporn Palm
Given the investment horizon of 90 days Microsoft is expected to generate 292.9 times less return on investment than Chumporn Palm. But when comparing it to its historical volatility, Microsoft is 48.36 times less risky than Chumporn Palm. It trades about 0.01 of its potential returns per unit of risk. Chumporn Palm Oil is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 259.00 in Chumporn Palm Oil on November 3, 2024 and sell it today you would earn a total of 35.00 from holding Chumporn Palm Oil or generate 13.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.77% |
| Values | Daily Returns |
Microsoft vs. Chumporn Palm Oil
Performance |
| Timeline |
| Microsoft |
| Chumporn Palm Oil |
Microsoft and Chumporn Palm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Chumporn Palm
The main advantage of trading using opposite Microsoft and Chumporn Palm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Chumporn Palm 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 Chumporn Palm will offset losses from the drop in Chumporn Palm's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Adobe Systems Incorporated | Microsoft vs. Crowdstrike Holdings |
| Chumporn Palm vs. Univanich Palm Oil | Chumporn Palm vs. Chiangmai Frozen Foods | Chumporn Palm vs. Dynasty Ceramic Public | Chumporn Palm vs. GFPT Public |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |