Correlation Between Microsoft and Kellner Merger
Can any of the company-specific risk be diversified away by investing in both Microsoft and Kellner Merger 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 Kellner Merger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Kellner Merger Fund, you can compare the effects of market volatilities on Microsoft and Kellner Merger 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 Kellner Merger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Kellner Merger.
Diversification Opportunities for Microsoft and Kellner Merger
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Kellner is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Kellner Merger Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kellner Merger 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 Kellner Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kellner Merger has no effect on the direction of Microsoft i.e., Microsoft and Kellner Merger go up and down completely randomly.
Pair Corralation between Microsoft and Kellner Merger
Given the investment horizon of 90 days Microsoft is expected to under-perform the Kellner Merger. In addition to that, Microsoft is 26.03 times more volatile than Kellner Merger Fund. It trades about -0.07 of its total potential returns per unit of risk. Kellner Merger Fund is currently generating about 0.41 per unit of volatility. If you would invest 986.00 in Kellner Merger Fund on October 22, 2024 and sell it today you would earn a total of 1.00 from holding Kellner Merger Fund or generate 0.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 31.58% |
| Values | Daily Returns |
Microsoft vs. Kellner Merger Fund
Performance |
| Timeline |
| Microsoft |
| Kellner Merger |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Microsoft and Kellner Merger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Kellner Merger
The main advantage of trading using opposite Microsoft and Kellner Merger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Kellner Merger 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 Kellner Merger will offset losses from the drop in Kellner Merger'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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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