Correlation Between Microsoft and KonaTel
Can any of the company-specific risk be diversified away by investing in both Microsoft and KonaTel 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 KonaTel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and KonaTel, you can compare the effects of market volatilities on Microsoft and KonaTel 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 KonaTel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and KonaTel.
Diversification Opportunities for Microsoft and KonaTel
Good diversification
The 3 months correlation between Microsoft and KonaTel is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and KonaTel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KonaTel 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 KonaTel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KonaTel has no effect on the direction of Microsoft i.e., Microsoft and KonaTel go up and down completely randomly.
Pair Corralation between Microsoft and KonaTel
Given the investment horizon of 90 days Microsoft is expected to generate 0.25 times more return on investment than KonaTel. However, Microsoft is 4.03 times less risky than KonaTel. It trades about 0.08 of its potential returns per unit of risk. KonaTel is currently generating about -0.03 per unit of risk. If you would invest 24,616 in Microsoft on August 25, 2024 and sell it today you would earn a total of 17,084 from holding Microsoft or generate 69.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. KonaTel
Performance |
| Timeline |
| Microsoft |
| KonaTel |
Microsoft and KonaTel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and KonaTel
The main advantage of trading using opposite Microsoft and KonaTel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, KonaTel 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 KonaTel will offset losses from the drop in KonaTel's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |