Correlation Between Microsoft and Great Lakes
Can any of the company-specific risk be diversified away by investing in both Microsoft and Great Lakes 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 Great Lakes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Great Lakes Large, you can compare the effects of market volatilities on Microsoft and Great Lakes 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 Great Lakes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Great Lakes.
Diversification Opportunities for Microsoft and Great Lakes
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Great is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Great Lakes Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Lakes Large 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 Great Lakes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Lakes Large has no effect on the direction of Microsoft i.e., Microsoft and Great Lakes go up and down completely randomly.
Pair Corralation between Microsoft and Great Lakes
If you would invest 23,488 in Microsoft on September 13, 2024 and sell it today you would earn a total of 21,468 from holding Microsoft or generate 91.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.85% |
| Values | Daily Returns |
Microsoft vs. Great Lakes Large
Performance |
| Timeline |
| Microsoft |
| Great Lakes Large |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Microsoft and Great Lakes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Great Lakes
The main advantage of trading using opposite Microsoft and Great Lakes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Great Lakes 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 Great Lakes will offset losses from the drop in Great Lakes' long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Great Lakes vs. Allianzgi Health Sciences | Great Lakes vs. Baillie Gifford Health | Great Lakes vs. Tekla Healthcare Opportunities | Great Lakes vs. Baron Health Care |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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