Correlation Between Microsoft and Dexus Convenience
Can any of the company-specific risk be diversified away by investing in both Microsoft and Dexus Convenience 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 Dexus Convenience into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Dexus Convenience Retail, you can compare the effects of market volatilities on Microsoft and Dexus Convenience 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 Dexus Convenience. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Dexus Convenience.
Diversification Opportunities for Microsoft and Dexus Convenience
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microsoft and Dexus is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Dexus Convenience Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dexus Convenience Retail 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 Dexus Convenience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dexus Convenience Retail has no effect on the direction of Microsoft i.e., Microsoft and Dexus Convenience go up and down completely randomly.
Pair Corralation between Microsoft and Dexus Convenience
Given the investment horizon of 90 days Microsoft is expected to generate 1.48 times less return on investment than Dexus Convenience. In addition to that, Microsoft is 1.01 times more volatile than Dexus Convenience Retail. It trades about 0.04 of its total potential returns per unit of risk. Dexus Convenience Retail is currently generating about 0.05 per unit of volatility. If you would invest 245.00 in Dexus Convenience Retail on November 1, 2024 and sell it today you would earn a total of 40.00 from holding Dexus Convenience Retail or generate 16.33% 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. Dexus Convenience Retail
Performance |
| Timeline |
| Microsoft |
| Dexus Convenience Retail |
Microsoft and Dexus Convenience Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Dexus Convenience
The main advantage of trading using opposite Microsoft and Dexus Convenience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Dexus Convenience 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 Dexus Convenience will offset losses from the drop in Dexus Convenience's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Adobe Systems Incorporated | Microsoft vs. Crowdstrike Holdings |
| Dexus Convenience vs. DY6 Metals | Dexus Convenience vs. Pinnacle Investment Management | Dexus Convenience vs. Steamships Trading | Dexus Convenience vs. K2 Asset Management |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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