Correlation Between Microsoft and Embrace Change
Can any of the company-specific risk be diversified away by investing in both Microsoft and Embrace Change 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 Embrace Change into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Embrace Change Acquisition, you can compare the effects of market volatilities on Microsoft and Embrace Change 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 Embrace Change. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Embrace Change.
Diversification Opportunities for Microsoft and Embrace Change
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Embrace is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Embrace Change Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embrace Change Acqui 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 Embrace Change. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embrace Change Acqui has no effect on the direction of Microsoft i.e., Microsoft and Embrace Change go up and down completely randomly.
Pair Corralation between Microsoft and Embrace Change
Given the investment horizon of 90 days Microsoft is expected to under-perform the Embrace Change. In addition to that, Microsoft is 7.69 times more volatile than Embrace Change Acquisition. It trades about -0.04 of its total potential returns per unit of risk. Embrace Change Acquisition is currently generating about 0.09 per unit of volatility. If you would invest 1,160 in Embrace Change Acquisition on August 31, 2024 and sell it today you would earn a total of 5.00 from holding Embrace Change Acquisition or generate 0.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Embrace Change Acquisition
Performance |
| Timeline |
| Microsoft |
| Embrace Change Acqui |
Microsoft and Embrace Change Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Embrace Change
The main advantage of trading using opposite Microsoft and Embrace Change positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Embrace Change 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 Embrace Change will offset losses from the drop in Embrace Change's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Embrace Change vs. China Health Management | Embrace Change vs. Absolute Health and | Embrace Change vs. Supurva Healthcare Group | Embrace Change vs. TransAKT |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |