Correlation Between Microsoft and GH Research
Can any of the company-specific risk be diversified away by investing in both Microsoft and GH Research 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 GH Research into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and GH Research PLC, you can compare the effects of market volatilities on Microsoft and GH Research 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 GH Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and GH Research.
Diversification Opportunities for Microsoft and GH Research
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microsoft and GHRS is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and GH Research PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GH Research PLC 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 GH Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GH Research PLC has no effect on the direction of Microsoft i.e., Microsoft and GH Research go up and down completely randomly.
Pair Corralation between Microsoft and GH Research
Given the investment horizon of 90 days Microsoft is expected to generate 0.28 times more return on investment than GH Research. However, Microsoft is 3.62 times less risky than GH Research. It trades about 0.05 of its potential returns per unit of risk. GH Research PLC is currently generating about -0.04 per unit of risk. If you would invest 41,229 in Microsoft on August 29, 2024 and sell it today you would earn a total of 1,570 from holding Microsoft or generate 3.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. GH Research PLC
Performance |
| Timeline |
| Microsoft |
| GH Research PLC |
Microsoft and GH Research Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and GH Research
The main advantage of trading using opposite Microsoft and GH Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, GH Research 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 GH Research will offset losses from the drop in GH Research's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| GH Research vs. Molecular Partners AG | GH Research vs. MediciNova | GH Research vs. Anebulo Pharmaceuticals | GH Research vs. Champions Oncology |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |