Correlation Between Microsoft and Latch
Can any of the company-specific risk be diversified away by investing in both Microsoft and Latch 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 Latch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Latch Inc, you can compare the effects of market volatilities on Microsoft and Latch 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 Latch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Latch.
Diversification Opportunities for Microsoft and Latch
Good diversification
The 3 months correlation between Microsoft and Latch is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Latch Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Latch Inc 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 Latch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Latch Inc has no effect on the direction of Microsoft i.e., Microsoft and Latch go up and down completely randomly.
Pair Corralation between Microsoft and Latch
If you would invest 17.00 in Latch Inc on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Latch Inc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Microsoft vs. Latch Inc
Performance |
| Timeline |
| Microsoft |
| Latch Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Microsoft and Latch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Latch
The main advantage of trading using opposite Microsoft and Latch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Latch 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 Latch will offset losses from the drop in Latch's long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Paysafe |
| Latch vs. Merit Medical Systems | Latch vs. US Global Investors | Latch vs. Chester Mining | Latch vs. Cumberland Pharmaceuticals |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |