Correlation Between Microsoft and Hammerson PLC
Can any of the company-specific risk be diversified away by investing in both Microsoft and Hammerson PLC 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 Hammerson PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Hammerson PLC, you can compare the effects of market volatilities on Microsoft and Hammerson PLC 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 Hammerson PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Hammerson PLC.
Diversification Opportunities for Microsoft and Hammerson PLC
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Hammerson is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Hammerson PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hammerson PLC 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 Hammerson PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hammerson PLC has no effect on the direction of Microsoft i.e., Microsoft and Hammerson PLC go up and down completely randomly.
Pair Corralation between Microsoft and Hammerson PLC
Given the investment horizon of 90 days Microsoft is expected to under-perform the Hammerson PLC. In addition to that, Microsoft is 1.08 times more volatile than Hammerson PLC. It trades about -0.01 of its total potential returns per unit of risk. Hammerson PLC is currently generating about 0.04 per unit of volatility. If you would invest 647,600 in Hammerson PLC on November 3, 2024 and sell it today you would earn a total of 9,400 from holding Hammerson PLC or generate 1.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Microsoft vs. Hammerson PLC
Performance |
| Timeline |
| Microsoft |
| Hammerson PLC |
Microsoft and Hammerson PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Hammerson PLC
The main advantage of trading using opposite Microsoft and Hammerson PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Hammerson PLC 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 Hammerson PLC will offset losses from the drop in Hammerson PLC's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Adobe Systems Incorporated | Microsoft vs. Crowdstrike Holdings |
| Hammerson PLC vs. Sasol Ltd Bee | Hammerson PLC vs. Sabvest Capital | Hammerson PLC vs. Growthpoint Properties | Hammerson PLC vs. Coronation Global Equity |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |