Correlation Between Microsoft and ELITE MEAT
Can any of the company-specific risk be diversified away by investing in both Microsoft and ELITE MEAT 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 ELITE MEAT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and ELITE MEAT PROCESSORS, you can compare the effects of market volatilities on Microsoft and ELITE MEAT 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 ELITE MEAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and ELITE MEAT.
Diversification Opportunities for Microsoft and ELITE MEAT
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Microsoft and ELITE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and ELITE MEAT PROCESSORS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELITE MEAT PROCESSORS 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 ELITE MEAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELITE MEAT PROCESSORS has no effect on the direction of Microsoft i.e., Microsoft and ELITE MEAT go up and down completely randomly.
Pair Corralation between Microsoft and ELITE MEAT
If you would invest 37,464 in Microsoft on September 14, 2024 and sell it today you would earn a total of 7,263 from holding Microsoft or generate 19.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 2.97% |
| Values | Daily Returns |
Microsoft vs. ELITE MEAT PROCESSORS
Performance |
| Timeline |
| Microsoft |
| ELITE MEAT PROCESSORS |
Microsoft and ELITE MEAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and ELITE MEAT
The main advantage of trading using opposite Microsoft and ELITE MEAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, ELITE MEAT 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 ELITE MEAT will offset losses from the drop in ELITE MEAT's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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