Correlation Between Microsoft and Elecster Oyj
Can any of the company-specific risk be diversified away by investing in both Microsoft and Elecster Oyj 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 Elecster Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Elecster Oyj A, you can compare the effects of market volatilities on Microsoft and Elecster Oyj 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 Elecster Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Elecster Oyj.
Diversification Opportunities for Microsoft and Elecster Oyj
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Elecster is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Elecster Oyj A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elecster Oyj 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 Elecster Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elecster Oyj A has no effect on the direction of Microsoft i.e., Microsoft and Elecster Oyj go up and down completely randomly.
Pair Corralation between Microsoft and Elecster Oyj
Given the investment horizon of 90 days Microsoft is expected to under-perform the Elecster Oyj. But the stock apears to be less risky and, when comparing its historical volatility, Microsoft is 2.41 times less risky than Elecster Oyj. The stock trades about -0.04 of its potential returns per unit of risk. The Elecster Oyj A is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 348.00 in Elecster Oyj A on August 30, 2024 and sell it today you would lose (2.00) from holding Elecster Oyj A or give up 0.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Microsoft vs. Elecster Oyj A
Performance |
| Timeline |
| Microsoft |
| Elecster Oyj A |
Microsoft and Elecster Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Elecster Oyj
The main advantage of trading using opposite Microsoft and Elecster Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Elecster Oyj 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 Elecster Oyj will offset losses from the drop in Elecster Oyj's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Elecster Oyj vs. Raute Oyj | Elecster Oyj vs. Honkarakenne Oyj B | Elecster Oyj vs. Wulff Yhtiot Oy | Elecster Oyj vs. Biohit Oyj B |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |