Correlation Between Microsoft and Hagar Hf
Can any of the company-specific risk be diversified away by investing in both Microsoft and Hagar Hf 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 Hagar Hf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Hagar hf, you can compare the effects of market volatilities on Microsoft and Hagar Hf 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 Hagar Hf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Hagar Hf.
Diversification Opportunities for Microsoft and Hagar Hf
Good diversification
The 3 months correlation between Microsoft and Hagar is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Hagar hf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hagar hf 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 Hagar Hf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hagar hf has no effect on the direction of Microsoft i.e., Microsoft and Hagar Hf go up and down completely randomly.
Pair Corralation between Microsoft and Hagar Hf
Given the investment horizon of 90 days Microsoft is expected to generate 1.13 times less return on investment than Hagar Hf. In addition to that, Microsoft is 1.04 times more volatile than Hagar hf. It trades about 0.19 of its total potential returns per unit of risk. Hagar hf is currently generating about 0.22 per unit of volatility. If you would invest 9,500 in Hagar hf on September 1, 2024 and sell it today you would earn a total of 500.00 from holding Hagar hf or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Microsoft vs. Hagar hf
Performance |
| Timeline |
| Microsoft |
| Hagar hf |
Microsoft and Hagar Hf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Hagar Hf
The main advantage of trading using opposite Microsoft and Hagar Hf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Hagar Hf 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 Hagar Hf will offset losses from the drop in Hagar Hf's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Hagar Hf vs. Icelandair Group hf | Hagar Hf vs. Arion banki hf | Hagar Hf vs. Festi hf | Hagar Hf vs. Marel hf |
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 CEOs Directory module to screen CEOs from public companies around the world.
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