Correlation Between Microsoft and LG DAX
Specify exactly 2 symbols:
By analyzing existing cross correlation between Microsoft and LG DAX Daily, you can compare the effects of market volatilities on Microsoft and LG DAX 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 LG DAX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and LG DAX.
Diversification Opportunities for Microsoft and LG DAX
Good diversification
The 3 months correlation between Microsoft and DES2 is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and LG DAX Daily in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG DAX Daily 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 LG DAX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG DAX Daily has no effect on the direction of Microsoft i.e., Microsoft and LG DAX go up and down completely randomly.
Pair Corralation between Microsoft and LG DAX
Given the investment horizon of 90 days Microsoft is expected to generate 0.9 times more return on investment than LG DAX. However, Microsoft is 1.12 times less risky than LG DAX. It trades about -0.04 of its potential returns per unit of risk. LG DAX Daily is currently generating about -0.06 per unit of risk. If you would invest 43,167 in Microsoft on August 31, 2024 and sell it today you would lose (821.00) from holding Microsoft or give up 1.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. LG DAX Daily
Performance |
| Timeline |
| Microsoft |
| LG DAX Daily |
Microsoft and LG DAX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and LG DAX
The main advantage of trading using opposite Microsoft and LG DAX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, LG DAX 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 LG DAX will offset losses from the drop in LG DAX's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| LG DAX vs. LG DAX Daily | LG DAX vs. iShares Govt Bond | LG DAX vs. Amundi MSCI Europe | LG DAX vs. iShares Global AAA AA |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |