Correlation Between Microsoft and Guggenheim Floating
Can any of the company-specific risk be diversified away by investing in both Microsoft and Guggenheim Floating 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 Guggenheim Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Guggenheim Floating Rate, you can compare the effects of market volatilities on Microsoft and Guggenheim Floating 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 Guggenheim Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Guggenheim Floating.
Diversification Opportunities for Microsoft and Guggenheim Floating
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Guggenheim is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Guggenheim Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Floating Rate 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 Guggenheim Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Floating Rate has no effect on the direction of Microsoft i.e., Microsoft and Guggenheim Floating go up and down completely randomly.
Pair Corralation between Microsoft and Guggenheim Floating
Given the investment horizon of 90 days Microsoft is expected to generate 29.36 times more return on investment than Guggenheim Floating. However, Microsoft is 29.36 times more volatile than Guggenheim Floating Rate. It trades about 0.19 of its potential returns per unit of risk. Guggenheim Floating Rate is currently generating about 0.25 per unit of risk. If you would invest 40,554 in Microsoft on September 1, 2024 and sell it today you would earn a total of 1,792 from holding Microsoft or generate 4.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Guggenheim Floating Rate
Performance |
| Timeline |
| Microsoft |
| Guggenheim Floating Rate |
Microsoft and Guggenheim Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Guggenheim Floating
The main advantage of trading using opposite Microsoft and Guggenheim Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Guggenheim Floating 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 Guggenheim Floating will offset losses from the drop in Guggenheim Floating's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Guggenheim Floating vs. Guggenheim Floating Rate | Guggenheim Floating vs. Guggenheim Floating Rate | Guggenheim Floating vs. Guggenheim Floating Rate | Guggenheim Floating vs. Guggenheim Macro Opportunities |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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