Correlation Between Microsoft and MeVis Medical
Can any of the company-specific risk be diversified away by investing in both Microsoft and MeVis Medical 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 MeVis Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and MeVis Medical Solutions, you can compare the effects of market volatilities on Microsoft and MeVis Medical 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 MeVis Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and MeVis Medical.
Diversification Opportunities for Microsoft and MeVis Medical
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Microsoft and MeVis is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and MeVis Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MeVis Medical Solutions 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 MeVis Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MeVis Medical Solutions has no effect on the direction of Microsoft i.e., Microsoft and MeVis Medical go up and down completely randomly.
Pair Corralation between Microsoft and MeVis Medical
Given the investment horizon of 90 days Microsoft is expected to generate 3.62 times more return on investment than MeVis Medical. However, Microsoft is 3.62 times more volatile than MeVis Medical Solutions. It trades about -0.01 of its potential returns per unit of risk. MeVis Medical Solutions is currently generating about -0.06 per unit of risk. If you would invest 41,858 in Microsoft on November 3, 2024 and sell it today you would lose (352.00) from holding Microsoft or give up 0.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Microsoft vs. MeVis Medical Solutions
Performance |
| Timeline |
| Microsoft |
| MeVis Medical Solutions |
Microsoft and MeVis Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and MeVis Medical
The main advantage of trading using opposite Microsoft and MeVis Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, MeVis Medical 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 MeVis Medical will offset losses from the drop in MeVis Medical's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Adobe Systems Incorporated | Microsoft vs. Crowdstrike Holdings |
| MeVis Medical vs. Siamgas And Petrochemicals | MeVis Medical vs. DAIDO METAL TD | MeVis Medical vs. Osisko Metals | MeVis Medical vs. Yuexiu Transport Infrastructure |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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