Correlation Between Microsoft and MAP Aktif
Can any of the company-specific risk be diversified away by investing in both Microsoft and MAP Aktif 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 MAP Aktif into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and MAP Aktif Adiperkasa, you can compare the effects of market volatilities on Microsoft and MAP Aktif 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 MAP Aktif. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and MAP Aktif.
Diversification Opportunities for Microsoft and MAP Aktif
Significant diversification
The 3 months correlation between Microsoft and MAP is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and MAP Aktif Adiperkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAP Aktif Adiperkasa 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 MAP Aktif. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAP Aktif Adiperkasa has no effect on the direction of Microsoft i.e., Microsoft and MAP Aktif go up and down completely randomly.
Pair Corralation between Microsoft and MAP Aktif
Given the investment horizon of 90 days Microsoft is expected to generate 0.38 times more return on investment than MAP Aktif. However, Microsoft is 2.6 times less risky than MAP Aktif. It trades about 0.19 of its potential returns per unit of risk. MAP Aktif Adiperkasa is currently generating about -0.02 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 | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Microsoft vs. MAP Aktif Adiperkasa
Performance |
| Timeline |
| Microsoft |
| MAP Aktif Adiperkasa |
Microsoft and MAP Aktif Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and MAP Aktif
The main advantage of trading using opposite Microsoft and MAP Aktif positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, MAP Aktif 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 MAP Aktif will offset losses from the drop in MAP Aktif's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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