Correlation Between Microsoft and BlackRock ESG
Can any of the company-specific risk be diversified away by investing in both Microsoft and BlackRock ESG 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 BlackRock ESG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and BlackRock ESG Multi Asset, you can compare the effects of market volatilities on Microsoft and BlackRock ESG 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 BlackRock ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and BlackRock ESG.
Diversification Opportunities for Microsoft and BlackRock ESG
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Microsoft and BlackRock is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and BlackRock ESG Multi Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock ESG Multi 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 BlackRock ESG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock ESG Multi has no effect on the direction of Microsoft i.e., Microsoft and BlackRock ESG go up and down completely randomly.
Pair Corralation between Microsoft and BlackRock ESG
Given the investment horizon of 90 days Microsoft is expected to generate 4.81 times more return on investment than BlackRock ESG. However, Microsoft is 4.81 times more volatile than BlackRock ESG Multi Asset. It trades about 0.19 of its potential returns per unit of risk. BlackRock ESG Multi Asset is currently generating about 0.32 per unit of risk. If you would invest 40,554 in Microsoft on September 1, 2024 and sell it today you would earn a total of 1,792 from holding Microsoft or generate 4.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Microsoft vs. BlackRock ESG Multi Asset
Performance |
| Timeline |
| Microsoft |
| BlackRock ESG Multi |
Microsoft and BlackRock ESG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and BlackRock ESG
The main advantage of trading using opposite Microsoft and BlackRock ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, BlackRock ESG 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 BlackRock ESG will offset losses from the drop in BlackRock ESG's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| BlackRock ESG vs. BlackRock ESG Multi Asset | BlackRock ESG vs. BlackRock ESG Multi Asset | BlackRock ESG vs. iShares MSCI Japan | BlackRock ESG vs. Amundi EUR High |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |