Correlation Between Microsoft and GBT Technologies
Can any of the company-specific risk be diversified away by investing in both Microsoft and GBT Technologies 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 GBT Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and GBT Technologies, you can compare the effects of market volatilities on Microsoft and GBT Technologies 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 GBT Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and GBT Technologies.
Diversification Opportunities for Microsoft and GBT Technologies
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and GBT is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and GBT Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GBT Technologies 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 GBT Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GBT Technologies has no effect on the direction of Microsoft i.e., Microsoft and GBT Technologies go up and down completely randomly.
Pair Corralation between Microsoft and GBT Technologies
Given the investment horizon of 90 days Microsoft is expected to under-perform the GBT Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Microsoft is 123.63 times less risky than GBT Technologies. The stock trades about -0.04 of its potential returns per unit of risk. The GBT Technologies is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 0.01 in GBT Technologies on August 31, 2024 and sell it today you would earn a total of 0.00 from holding GBT Technologies or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. GBT Technologies
Performance |
| Timeline |
| Microsoft |
| GBT Technologies |
Microsoft and GBT Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and GBT Technologies
The main advantage of trading using opposite Microsoft and GBT Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, GBT Technologies 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 GBT Technologies will offset losses from the drop in GBT Technologies' long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| GBT Technologies vs. SEATech Ventures Corp | GBT Technologies vs. Alternet Systems | GBT Technologies vs. Crypto Co | GBT Technologies vs. Xalles Holdings |
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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