Correlation Between Microsoft and Intevac
Can any of the company-specific risk be diversified away by investing in both Microsoft and Intevac 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 Intevac into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Intevac, you can compare the effects of market volatilities on Microsoft and Intevac 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 Intevac. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Intevac.
Diversification Opportunities for Microsoft and Intevac
Average diversification
The 3 months correlation between Microsoft and Intevac is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Intevac in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intevac 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 Intevac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intevac has no effect on the direction of Microsoft i.e., Microsoft and Intevac go up and down completely randomly.
Pair Corralation between Microsoft and Intevac
Given the investment horizon of 90 days Microsoft is expected to under-perform the Intevac. In addition to that, Microsoft is 1.36 times more volatile than Intevac. It trades about -0.01 of its total potential returns per unit of risk. Intevac is currently generating about 0.07 per unit of volatility. If you would invest 345.00 in Intevac on November 3, 2024 and sell it today you would earn a total of 7.00 from holding Intevac or generate 2.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Intevac
Performance |
| Timeline |
| Microsoft |
| Intevac |
Microsoft and Intevac Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Intevac
The main advantage of trading using opposite Microsoft and Intevac positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Intevac 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 Intevac will offset losses from the drop in Intevac's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Adobe Systems Incorporated | Microsoft vs. Crowdstrike Holdings |
| Intevac vs. Innovative Solutions and | Intevac vs. Heidrick Struggles International | Intevac vs. ICF International | Intevac vs. PDF Solutions |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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