Correlation Between Microsoft and Gecina SA
Can any of the company-specific risk be diversified away by investing in both Microsoft and Gecina SA 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 Gecina SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Gecina SA, you can compare the effects of market volatilities on Microsoft and Gecina SA 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 Gecina SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Gecina SA.
Diversification Opportunities for Microsoft and Gecina SA
Modest diversification
The 3 months correlation between Microsoft and Gecina is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Gecina SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gecina SA 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 Gecina SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gecina SA has no effect on the direction of Microsoft i.e., Microsoft and Gecina SA go up and down completely randomly.
Pair Corralation between Microsoft and Gecina SA
Given the investment horizon of 90 days Microsoft is expected to generate 1.0 times more return on investment than Gecina SA. However, Microsoft is 1.0 times less risky than Gecina SA. It trades about 0.15 of its potential returns per unit of risk. Gecina SA is currently generating about -0.09 per unit of risk. If you would invest 40,955 in Microsoft on September 2, 2024 and sell it today you would earn a total of 1,391 from holding Microsoft or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Microsoft vs. Gecina SA
Performance |
| Timeline |
| Microsoft |
| Gecina SA |
Microsoft and Gecina SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Gecina SA
The main advantage of trading using opposite Microsoft and Gecina SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Gecina SA 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 Gecina SA will offset losses from the drop in Gecina SA's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Gecina SA vs. IMAGIN MEDICAL INC | Gecina SA vs. Merit Medical Systems | Gecina SA vs. MACOM Technology Solutions | Gecina SA vs. SCOTT TECHNOLOGY |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |