Correlation Between Microsoft and Loop Media
Can any of the company-specific risk be diversified away by investing in both Microsoft and Loop Media 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 Loop Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Loop Media, you can compare the effects of market volatilities on Microsoft and Loop Media 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 Loop Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Loop Media.
Diversification Opportunities for Microsoft and Loop Media
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Loop is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Loop Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loop Media 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 Loop Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loop Media has no effect on the direction of Microsoft i.e., Microsoft and Loop Media go up and down completely randomly.
Pair Corralation between Microsoft and Loop Media
If you would invest 40,978 in Microsoft on August 28, 2024 and sell it today you would earn a total of 901.00 from holding Microsoft or generate 2.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 1.59% |
| Values | Daily Returns |
Microsoft vs. Loop Media
Performance |
| Timeline |
| Microsoft |
| Loop Media |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Microsoft and Loop Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Loop Media
The main advantage of trading using opposite Microsoft and Loop Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Loop Media 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 Loop Media will offset losses from the drop in Loop Media's long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Paysafe |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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