Correlation Between Microsoft and Maven Wireless
Can any of the company-specific risk be diversified away by investing in both Microsoft and Maven Wireless 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 Maven Wireless into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Maven Wireless Sweden, you can compare the effects of market volatilities on Microsoft and Maven Wireless 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 Maven Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Maven Wireless.
Diversification Opportunities for Microsoft and Maven Wireless
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microsoft and Maven is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Maven Wireless Sweden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maven Wireless Sweden 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 Maven Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maven Wireless Sweden has no effect on the direction of Microsoft i.e., Microsoft and Maven Wireless go up and down completely randomly.
Pair Corralation between Microsoft and Maven Wireless
Given the investment horizon of 90 days Microsoft is expected to under-perform the Maven Wireless. But the stock apears to be less risky and, when comparing its historical volatility, Microsoft is 1.94 times less risky than Maven Wireless. The stock trades about -0.06 of its potential returns per unit of risk. The Maven Wireless Sweden is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,025 in Maven Wireless Sweden on November 5, 2024 and sell it today you would earn a total of 205.00 from holding Maven Wireless Sweden or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Microsoft vs. Maven Wireless Sweden
Performance |
| Timeline |
| Microsoft |
| Maven Wireless Sweden |
Microsoft and Maven Wireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Maven Wireless
The main advantage of trading using opposite Microsoft and Maven Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Maven Wireless 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 Maven Wireless will offset losses from the drop in Maven Wireless' long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Adobe Systems Incorporated | Microsoft vs. Crowdstrike Holdings |
| Maven Wireless vs. Checkin Group AB | Maven Wireless vs. Midsummer AB | Maven Wireless vs. Hexatronic Group AB | Maven Wireless vs. Cint Group AB |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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