Correlation Between Microsoft and CT Real
Can any of the company-specific risk be diversified away by investing in both Microsoft and CT Real 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 CT Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and CT Real Estate, you can compare the effects of market volatilities on Microsoft and CT Real 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 CT Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and CT Real.
Diversification Opportunities for Microsoft and CT Real
Very weak diversification
The 3 months correlation between Microsoft and CRT-UN is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and CT Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CT Real Estate 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 CT Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CT Real Estate has no effect on the direction of Microsoft i.e., Microsoft and CT Real go up and down completely randomly.
Pair Corralation between Microsoft and CT Real
Given the investment horizon of 90 days Microsoft is expected to generate 2.1 times more return on investment than CT Real. However, Microsoft is 2.1 times more volatile than CT Real Estate. It trades about 0.02 of its potential returns per unit of risk. CT Real Estate is currently generating about -0.11 per unit of risk. If you would invest 42,574 in Microsoft on August 29, 2024 and sell it today you would earn a total of 225.00 from holding Microsoft or generate 0.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. CT Real Estate
Performance |
| Timeline |
| Microsoft |
| CT Real Estate |
Microsoft and CT Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and CT Real
The main advantage of trading using opposite Microsoft and CT Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, CT Real 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 CT Real will offset losses from the drop in CT Real's long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Paysafe |
| CT Real vs. Choice Properties Real | CT Real vs. Crombie Real Estate | CT Real vs. Granite Real Estate | CT Real vs. Allied Properties Real |
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 Correlations module to find global opportunities by holding instruments from different markets.
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