Correlation Between Microsoft and Millbank Mining
Can any of the company-specific risk be diversified away by investing in both Microsoft and Millbank Mining 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 Millbank Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Millbank Mining Corp, you can compare the effects of market volatilities on Microsoft and Millbank Mining 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 Millbank Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Millbank Mining.
Diversification Opportunities for Microsoft and Millbank Mining
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microsoft and Millbank is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Millbank Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Millbank Mining Corp 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 Millbank Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Millbank Mining Corp has no effect on the direction of Microsoft i.e., Microsoft and Millbank Mining go up and down completely randomly.
Pair Corralation between Microsoft and Millbank Mining
Given the investment horizon of 90 days Microsoft is expected to generate 115.54 times less return on investment than Millbank Mining. But when comparing it to its historical volatility, Microsoft is 11.36 times less risky than Millbank Mining. It trades about 0.02 of its potential returns per unit of risk. Millbank Mining Corp is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 7.50 in Millbank Mining Corp on September 19, 2024 and sell it today you would earn a total of 39.50 from holding Millbank Mining Corp or generate 526.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Microsoft vs. Millbank Mining Corp
Performance |
| Timeline |
| Microsoft |
| Millbank Mining Corp |
Microsoft and Millbank Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Millbank Mining
The main advantage of trading using opposite Microsoft and Millbank Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Millbank Mining 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 Millbank Mining will offset losses from the drop in Millbank Mining's long position.| Microsoft vs. Global Blue Group | Microsoft vs. Aurora Mobile | Microsoft vs. Marqeta | Microsoft vs. Nextnav Acquisition Corp |
| Millbank Mining vs. Foraco International SA | Millbank Mining vs. Geodrill Limited | Millbank Mining vs. Bri Chem Corp |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |