Correlation Between Microsoft and Investin Optimal
Can any of the company-specific risk be diversified away by investing in both Microsoft and Investin Optimal 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 Investin Optimal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Investin Optimal Stabil, you can compare the effects of market volatilities on Microsoft and Investin Optimal 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 Investin Optimal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Investin Optimal.
Diversification Opportunities for Microsoft and Investin Optimal
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Microsoft and Investin is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Investin Optimal Stabil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investin Optimal Stabil 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 Investin Optimal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investin Optimal Stabil has no effect on the direction of Microsoft i.e., Microsoft and Investin Optimal go up and down completely randomly.
Pair Corralation between Microsoft and Investin Optimal
Given the investment horizon of 90 days Microsoft is expected to generate 5.84 times more return on investment than Investin Optimal. However, Microsoft is 5.84 times more volatile than Investin Optimal Stabil. It trades about 0.06 of its potential returns per unit of risk. Investin Optimal Stabil is currently generating about 0.22 per unit of risk. If you would invest 43,440 in Microsoft on September 20, 2024 and sell it today you would earn a total of 2,006 from holding Microsoft or generate 4.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Microsoft vs. Investin Optimal Stabil
Performance |
| Timeline |
| Microsoft |
| Investin Optimal Stabil |
Microsoft and Investin Optimal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Investin Optimal
The main advantage of trading using opposite Microsoft and Investin Optimal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Investin Optimal 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 Investin Optimal will offset losses from the drop in Investin Optimal's long position.| Microsoft vs. Global Blue Group | Microsoft vs. Aurora Mobile | Microsoft vs. Marqeta | Microsoft vs. Nextnav Acquisition Corp |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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