Correlation Between Microsoft and Hawesko Holding
Can any of the company-specific risk be diversified away by investing in both Microsoft and Hawesko Holding 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 Hawesko Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Hawesko Holding AG, you can compare the effects of market volatilities on Microsoft and Hawesko Holding 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 Hawesko Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Hawesko Holding.
Diversification Opportunities for Microsoft and Hawesko Holding
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Hawesko is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Hawesko Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawesko Holding AG 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 Hawesko Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawesko Holding AG has no effect on the direction of Microsoft i.e., Microsoft and Hawesko Holding go up and down completely randomly.
Pair Corralation between Microsoft and Hawesko Holding
Given the investment horizon of 90 days Microsoft is expected to generate 0.64 times more return on investment than Hawesko Holding. However, Microsoft is 1.56 times less risky than Hawesko Holding. It trades about 0.06 of its potential returns per unit of risk. Hawesko Holding AG is currently generating about -0.05 per unit of risk. If you would invest 36,640 in Microsoft on August 29, 2024 and sell it today you would earn a total of 6,159 from holding Microsoft or generate 16.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Microsoft vs. Hawesko Holding AG
Performance |
| Timeline |
| Microsoft |
| Hawesko Holding AG |
Microsoft and Hawesko Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Hawesko Holding
The main advantage of trading using opposite Microsoft and Hawesko Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Hawesko Holding 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 Hawesko Holding will offset losses from the drop in Hawesko Holding's long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Paysafe |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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