Correlation Between Microsoft and Kekrops SA
Can any of the company-specific risk be diversified away by investing in both Microsoft and Kekrops SA 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 Kekrops SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Kekrops SA, you can compare the effects of market volatilities on Microsoft and Kekrops SA 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 Kekrops SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Kekrops SA.
Diversification Opportunities for Microsoft and Kekrops SA
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Kekrops is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Kekrops SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kekrops SA 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 Kekrops SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kekrops SA has no effect on the direction of Microsoft i.e., Microsoft and Kekrops SA go up and down completely randomly.
Pair Corralation between Microsoft and Kekrops SA
Given the investment horizon of 90 days Microsoft is expected to under-perform the Kekrops SA. But the stock apears to be less risky and, when comparing its historical volatility, Microsoft is 1.56 times less risky than Kekrops SA. The stock trades about -0.33 of its potential returns per unit of risk. The Kekrops SA is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest 138.00 in Kekrops SA on November 29, 2024 and sell it today you would lose (13.00) from holding Kekrops SA or give up 9.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Microsoft vs. Kekrops SA
Performance |
| Timeline |
| Microsoft |
| Kekrops SA |
Microsoft and Kekrops SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Kekrops SA
The main advantage of trading using opposite Microsoft and Kekrops SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Kekrops SA 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 Kekrops SA will offset losses from the drop in Kekrops SA's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Adobe Systems Incorporated | Microsoft vs. Crowdstrike Holdings |
| Kekrops SA vs. Alpha Astika Akinita | Kekrops SA vs. Terna Energy Societe | Kekrops SA vs. Intracom Constructions Societe | Kekrops SA vs. Attica Bank SA |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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