Correlation Between Microsoft and Klabin SA
Can any of the company-specific risk be diversified away by investing in both Microsoft and Klabin 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 Klabin SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Klabin SA, you can compare the effects of market volatilities on Microsoft and Klabin 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 Klabin SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Klabin SA.
Diversification Opportunities for Microsoft and Klabin SA
Very weak diversification
The 3 months correlation between Microsoft and Klabin is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Klabin SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klabin 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 Klabin SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klabin SA has no effect on the direction of Microsoft i.e., Microsoft and Klabin SA go up and down completely randomly.
Pair Corralation between Microsoft and Klabin SA
Given the investment horizon of 90 days Microsoft is expected to under-perform the Klabin SA. In addition to that, Microsoft is 1.43 times more volatile than Klabin SA. It trades about -0.06 of its total potential returns per unit of risk. Klabin SA is currently generating about 0.06 per unit of volatility. If you would invest 472.00 in Klabin SA on November 5, 2024 and sell it today you would earn a total of 8.00 from holding Klabin SA or generate 1.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Microsoft vs. Klabin SA
Performance |
| Timeline |
| Microsoft |
| Klabin SA |
Microsoft and Klabin SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Klabin SA
The main advantage of trading using opposite Microsoft and Klabin SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Klabin 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 Klabin SA will offset losses from the drop in Klabin SA's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Adobe Systems Incorporated | Microsoft vs. Crowdstrike Holdings |
| Klabin SA vs. Klabin SA | Klabin SA vs. Transmissora Aliana de | Klabin SA vs. Klabin SA | Klabin SA vs. Itasa Investimentos |
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 Managers module to screen money managers from public funds and ETFs managed around the world.
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