Correlation Between Microsoft and Essity AB
Specify exactly 2 symbols:
By analyzing existing cross correlation between Microsoft and Essity AB, you can compare the effects of market volatilities on Microsoft and Essity AB 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 Essity AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Essity AB.
Diversification Opportunities for Microsoft and Essity AB
Modest diversification
The 3 months correlation between Microsoft and Essity is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Essity AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Essity AB 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 Essity AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Essity AB has no effect on the direction of Microsoft i.e., Microsoft and Essity AB go up and down completely randomly.
Pair Corralation between Microsoft and Essity AB
Given the investment horizon of 90 days Microsoft is expected to generate 1.28 times more return on investment than Essity AB. However, Microsoft is 1.28 times more volatile than Essity AB. It trades about 0.09 of its potential returns per unit of risk. Essity AB is currently generating about 0.04 per unit of risk. If you would invest 24,146 in Microsoft on August 30, 2024 and sell it today you would earn a total of 18,153 from holding Microsoft or generate 75.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Microsoft vs. Essity AB
Performance |
| Timeline |
| Microsoft |
| Essity AB |
Microsoft and Essity AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Essity AB
The main advantage of trading using opposite Microsoft and Essity AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Essity AB 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 Essity AB will offset losses from the drop in Essity AB's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Essity AB vs. Mendus AB | Essity AB vs. JonDeTech Sensors | Essity AB vs. Nexam Chemical Holding | Essity AB vs. Lohilo Foods AB |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |