Correlation Between Microsoft and Calamos Phineus
Can any of the company-specific risk be diversified away by investing in both Microsoft and Calamos Phineus 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 Calamos Phineus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Calamos Phineus Longshort, you can compare the effects of market volatilities on Microsoft and Calamos Phineus 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 Calamos Phineus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Calamos Phineus.
Diversification Opportunities for Microsoft and Calamos Phineus
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Calamos is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Calamos Phineus Longshort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Phineus Longshort 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 Calamos Phineus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Phineus Longshort has no effect on the direction of Microsoft i.e., Microsoft and Calamos Phineus go up and down completely randomly.
Pair Corralation between Microsoft and Calamos Phineus
Given the investment horizon of 90 days Microsoft is expected to generate 2.84 times more return on investment than Calamos Phineus. However, Microsoft is 2.84 times more volatile than Calamos Phineus Longshort. It trades about 0.08 of its potential returns per unit of risk. Calamos Phineus Longshort is currently generating about 0.06 per unit of risk. If you would invest 24,341 in Microsoft on August 29, 2024 and sell it today you would earn a total of 17,958 from holding Microsoft or generate 73.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Calamos Phineus Longshort
Performance |
| Timeline |
| Microsoft |
| Calamos Phineus Longshort |
Microsoft and Calamos Phineus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Calamos Phineus
The main advantage of trading using opposite Microsoft and Calamos Phineus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Calamos Phineus 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 Calamos Phineus will offset losses from the drop in Calamos Phineus' long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Calamos Phineus vs. Neuberger Berman Long | Calamos Phineus vs. Neuberger Berman Long | Calamos Phineus vs. Pimco Rae Worldwide |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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