Correlation Between Microsoft and First Trustaberdeen
Can any of the company-specific risk be diversified away by investing in both Microsoft and First Trustaberdeen 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 First Trustaberdeen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and First Trustaberdeen Emerging, you can compare the effects of market volatilities on Microsoft and First Trustaberdeen 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 First Trustaberdeen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and First Trustaberdeen.
Diversification Opportunities for Microsoft and First Trustaberdeen
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Microsoft and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and First Trustaberdeen Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trustaberdeen 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 First Trustaberdeen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trustaberdeen has no effect on the direction of Microsoft i.e., Microsoft and First Trustaberdeen go up and down completely randomly.
Pair Corralation between Microsoft and First Trustaberdeen
If you would invest (100.00) in First Trustaberdeen Emerging on August 27, 2024 and sell it today you would earn a total of 100.00 from holding First Trustaberdeen Emerging or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Microsoft vs. First Trustaberdeen Emerging
Performance |
| Timeline |
| Microsoft |
| First Trustaberdeen |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Microsoft and First Trustaberdeen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and First Trustaberdeen
The main advantage of trading using opposite Microsoft and First Trustaberdeen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, First Trustaberdeen 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 First Trustaberdeen will offset losses from the drop in First Trustaberdeen's long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Rapid7 Inc |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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