Correlation Between Microsoft and Orsted AS
Can any of the company-specific risk be diversified away by investing in both Microsoft and Orsted AS 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 Orsted AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Orsted AS, you can compare the effects of market volatilities on Microsoft and Orsted AS 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 Orsted AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Orsted AS.
Diversification Opportunities for Microsoft and Orsted AS
Very good diversification
The 3 months correlation between Microsoft and Orsted is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Orsted AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orsted AS 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 Orsted AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orsted AS has no effect on the direction of Microsoft i.e., Microsoft and Orsted AS go up and down completely randomly.
Pair Corralation between Microsoft and Orsted AS
Given the investment horizon of 90 days Microsoft is expected to generate 0.46 times more return on investment than Orsted AS. However, Microsoft is 2.2 times less risky than Orsted AS. It trades about 0.09 of its potential returns per unit of risk. Orsted AS is currently generating about -0.02 per unit of risk. If you would invest 23,866 in Microsoft on October 14, 2024 and sell it today you would earn a total of 18,029 from holding Microsoft or generate 75.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
Microsoft vs. Orsted AS
Performance |
| Timeline |
| Microsoft |
| Orsted AS |
Microsoft and Orsted AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Orsted AS
The main advantage of trading using opposite Microsoft and Orsted AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Orsted AS 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 Orsted AS will offset losses from the drop in Orsted AS's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Orsted AS vs. Tradeweb Markets | Orsted AS vs. Canon Marketing Japan | Orsted AS vs. SIDETRADE EO 1 | Orsted AS vs. TRADELINK ELECTRON |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |