Correlation Between Microsoft and KRUNGTHAI CARD
Can any of the company-specific risk be diversified away by investing in both Microsoft and KRUNGTHAI CARD 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 KRUNGTHAI CARD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and KRUNGTHAI CARD FGN, you can compare the effects of market volatilities on Microsoft and KRUNGTHAI CARD 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 KRUNGTHAI CARD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and KRUNGTHAI CARD.
Diversification Opportunities for Microsoft and KRUNGTHAI CARD
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Microsoft and KRUNGTHAI is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and KRUNGTHAI CARD FGN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KRUNGTHAI CARD FGN 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 KRUNGTHAI CARD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KRUNGTHAI CARD FGN has no effect on the direction of Microsoft i.e., Microsoft and KRUNGTHAI CARD go up and down completely randomly.
Pair Corralation between Microsoft and KRUNGTHAI CARD
Given the investment horizon of 90 days Microsoft is expected to generate 1.29 times less return on investment than KRUNGTHAI CARD. In addition to that, Microsoft is 1.6 times more volatile than KRUNGTHAI CARD FGN. It trades about 0.13 of its total potential returns per unit of risk. KRUNGTHAI CARD FGN is currently generating about 0.26 per unit of volatility. If you would invest 135.00 in KRUNGTHAI CARD FGN on October 28, 2024 and sell it today you would earn a total of 6.00 from holding KRUNGTHAI CARD FGN or generate 4.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Microsoft vs. KRUNGTHAI CARD FGN
Performance |
| Timeline |
| Microsoft |
| KRUNGTHAI CARD FGN |
Microsoft and KRUNGTHAI CARD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and KRUNGTHAI CARD
The main advantage of trading using opposite Microsoft and KRUNGTHAI CARD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, KRUNGTHAI CARD 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 KRUNGTHAI CARD will offset losses from the drop in KRUNGTHAI CARD's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. BLOCK INC | Microsoft vs. Adobe Systems Incorporated |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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