Correlation Between Microsoft and EvoAir Holdings
Can any of the company-specific risk be diversified away by investing in both Microsoft and EvoAir Holdings 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 EvoAir Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and EvoAir Holdings, you can compare the effects of market volatilities on Microsoft and EvoAir Holdings 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 EvoAir Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and EvoAir Holdings.
Diversification Opportunities for Microsoft and EvoAir Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Microsoft and EvoAir is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and EvoAir Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EvoAir Holdings 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 EvoAir Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EvoAir Holdings has no effect on the direction of Microsoft i.e., Microsoft and EvoAir Holdings go up and down completely randomly.
Pair Corralation between Microsoft and EvoAir Holdings
Given the investment horizon of 90 days Microsoft is expected to generate 7.38 times more return on investment than EvoAir Holdings. However, Microsoft is 7.38 times more volatile than EvoAir Holdings. It trades about 0.08 of its potential returns per unit of risk. EvoAir Holdings is currently generating about 0.04 per unit of risk. If you would invest 24,042 in Microsoft on August 28, 2024 and sell it today you would earn a total of 17,837 from holding Microsoft or generate 74.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. EvoAir Holdings
Performance |
| Timeline |
| Microsoft |
| EvoAir Holdings |
Microsoft and EvoAir Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and EvoAir Holdings
The main advantage of trading using opposite Microsoft and EvoAir Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, EvoAir Holdings 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 EvoAir Holdings will offset losses from the drop in EvoAir Holdings' long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Paysafe |
| EvoAir Holdings vs. Legacy Education | EvoAir Holdings vs. NVIDIA | EvoAir Holdings vs. Apple Inc | EvoAir Holdings vs. Microsoft |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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