Correlation Between Microsoft and Kiattana Transport
Can any of the company-specific risk be diversified away by investing in both Microsoft and Kiattana Transport 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 Kiattana Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Kiattana Transport Public, you can compare the effects of market volatilities on Microsoft and Kiattana Transport 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 Kiattana Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Kiattana Transport.
Diversification Opportunities for Microsoft and Kiattana Transport
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Kiattana is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Kiattana Transport Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kiattana Transport Public 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 Kiattana Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kiattana Transport Public has no effect on the direction of Microsoft i.e., Microsoft and Kiattana Transport go up and down completely randomly.
Pair Corralation between Microsoft and Kiattana Transport
Given the investment horizon of 90 days Microsoft is expected to generate 0.99 times more return on investment than Kiattana Transport. However, Microsoft is 1.01 times less risky than Kiattana Transport. It trades about -0.01 of its potential returns per unit of risk. Kiattana Transport Public is currently generating about -0.06 per unit of risk. If you would invest 41,858 in Microsoft on November 3, 2024 and sell it today you would lose (352.00) from holding Microsoft or give up 0.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Microsoft vs. Kiattana Transport Public
Performance |
| Timeline |
| Microsoft |
| Kiattana Transport Public |
Microsoft and Kiattana Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Kiattana Transport
The main advantage of trading using opposite Microsoft and Kiattana Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Kiattana Transport 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 Kiattana Transport will offset losses from the drop in Kiattana Transport's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Adobe Systems Incorporated | Microsoft vs. Crowdstrike Holdings |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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