Correlation Between Microsoft and Komax Holding
Can any of the company-specific risk be diversified away by investing in both Microsoft and Komax Holding 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 Komax Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Komax Holding AG, you can compare the effects of market volatilities on Microsoft and Komax Holding 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 Komax Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Komax Holding.
Diversification Opportunities for Microsoft and Komax Holding
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Microsoft and Komax is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Komax Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Komax Holding AG 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 Komax Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Komax Holding AG has no effect on the direction of Microsoft i.e., Microsoft and Komax Holding go up and down completely randomly.
Pair Corralation between Microsoft and Komax Holding
Given the investment horizon of 90 days Microsoft is expected to under-perform the Komax Holding. But the stock apears to be less risky and, when comparing its historical volatility, Microsoft is 2.34 times less risky than Komax Holding. The stock trades about -0.03 of its potential returns per unit of risk. The Komax Holding AG is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 11,920 in Komax Holding AG on November 8, 2024 and sell it today you would earn a total of 1,380 from holding Komax Holding AG or generate 11.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Microsoft vs. Komax Holding AG
Performance |
| Timeline |
| Microsoft |
| Komax Holding AG |
Microsoft and Komax Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Komax Holding
The main advantage of trading using opposite Microsoft and Komax Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Komax Holding 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 Komax Holding will offset losses from the drop in Komax Holding's long position.| Microsoft vs. Crowdstrike Holdings | Microsoft vs. Okta Inc | Microsoft vs. Cloudflare | Microsoft vs. MongoDB |
| Komax Holding vs. Comet Holding AG | Komax Holding vs. Bossard Holding AG | Komax Holding vs. VAT Group AG | Komax Holding vs. Bucher Industries AG |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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