Correlation Between Microsoft and Kjell Group
Can any of the company-specific risk be diversified away by investing in both Microsoft and Kjell Group 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 Kjell Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Kjell Group AB, you can compare the effects of market volatilities on Microsoft and Kjell Group 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 Kjell Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Kjell Group.
Diversification Opportunities for Microsoft and Kjell Group
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Microsoft and Kjell is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Kjell Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kjell Group AB 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 Kjell Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kjell Group AB has no effect on the direction of Microsoft i.e., Microsoft and Kjell Group go up and down completely randomly.
Pair Corralation between Microsoft and Kjell Group
Given the investment horizon of 90 days Microsoft is expected to generate 0.37 times more return on investment than Kjell Group. However, Microsoft is 2.7 times less risky than Kjell Group. It trades about 0.19 of its potential returns per unit of risk. Kjell Group AB is currently generating about -0.33 per unit of risk. If you would invest 40,554 in Microsoft on September 1, 2024 and sell it today you would earn a total of 1,792 from holding Microsoft or generate 4.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Microsoft vs. Kjell Group AB
Performance |
| Timeline |
| Microsoft |
| Kjell Group AB |
Microsoft and Kjell Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Kjell Group
The main advantage of trading using opposite Microsoft and Kjell Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Kjell Group 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 Kjell Group will offset losses from the drop in Kjell Group's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Kjell Group vs. Clas Ohlson AB | Kjell Group vs. Ctek AB | Kjell Group vs. Truecaller AB | Kjell Group vs. Dustin Group AB |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |