Correlation Between Microsoft and Holcim Philippines
Can any of the company-specific risk be diversified away by investing in both Microsoft and Holcim Philippines 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 Holcim Philippines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Holcim Philippines, you can compare the effects of market volatilities on Microsoft and Holcim Philippines 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 Holcim Philippines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Holcim Philippines.
Diversification Opportunities for Microsoft and Holcim Philippines
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Microsoft and Holcim is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Holcim Philippines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holcim Philippines 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 Holcim Philippines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holcim Philippines has no effect on the direction of Microsoft i.e., Microsoft and Holcim Philippines go up and down completely randomly.
Pair Corralation between Microsoft and Holcim Philippines
If you would invest 40,955 in Microsoft on September 2, 2024 and sell it today you would earn a total of 1,391 from holding Microsoft or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Microsoft vs. Holcim Philippines
Performance |
| Timeline |
| Microsoft |
| Holcim Philippines |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Microsoft and Holcim Philippines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Holcim Philippines
The main advantage of trading using opposite Microsoft and Holcim Philippines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Holcim Philippines 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 Holcim Philippines will offset losses from the drop in Holcim Philippines' long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Holcim Philippines vs. Amkor Technology | Holcim Philippines vs. Paysafe | Holcim Philippines vs. Treasury Wine Estates | Holcim Philippines vs. The Coca Cola |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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