Correlation Between Microsoft and Eshallgo
Can any of the company-specific risk be diversified away by investing in both Microsoft and Eshallgo 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 Eshallgo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Eshallgo Class A, you can compare the effects of market volatilities on Microsoft and Eshallgo 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 Eshallgo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Eshallgo.
Diversification Opportunities for Microsoft and Eshallgo
Significant diversification
The 3 months correlation between Microsoft and Eshallgo is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Eshallgo Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eshallgo Class A 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 Eshallgo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eshallgo Class A has no effect on the direction of Microsoft i.e., Microsoft and Eshallgo go up and down completely randomly.
Pair Corralation between Microsoft and Eshallgo
Given the investment horizon of 90 days Microsoft is expected to generate 0.15 times more return on investment than Eshallgo. However, Microsoft is 6.83 times less risky than Eshallgo. It trades about -0.01 of its potential returns per unit of risk. Eshallgo Class A is currently generating about -0.31 per unit of risk. If you would invest 41,858 in Microsoft on November 3, 2024 and sell it today you would lose (352.00) from holding Microsoft or give up 0.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Eshallgo Class A
Performance |
| Timeline |
| Microsoft |
| Eshallgo Class A |
Microsoft and Eshallgo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Eshallgo
The main advantage of trading using opposite Microsoft and Eshallgo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Eshallgo 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 Eshallgo will offset losses from the drop in Eshallgo's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Adobe Systems Incorporated | Microsoft vs. Crowdstrike Holdings |
| Eshallgo vs. Energy and Environmental | Eshallgo vs. Allegheny Technologies Incorporated | Eshallgo vs. Algoma Steel Group | Eshallgo vs. Lizhan Environmental |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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