Correlation Between Microsoft and Mirriad Advertising
Can any of the company-specific risk be diversified away by investing in both Microsoft and Mirriad Advertising 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 Mirriad Advertising into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Mirriad Advertising plc, you can compare the effects of market volatilities on Microsoft and Mirriad Advertising 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 Mirriad Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Mirriad Advertising.
Diversification Opportunities for Microsoft and Mirriad Advertising
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Mirriad is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Mirriad Advertising plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirriad Advertising plc 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 Mirriad Advertising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirriad Advertising plc has no effect on the direction of Microsoft i.e., Microsoft and Mirriad Advertising go up and down completely randomly.
Pair Corralation between Microsoft and Mirriad Advertising
Given the investment horizon of 90 days Microsoft is expected to generate 0.18 times more return on investment than Mirriad Advertising. However, Microsoft is 5.68 times less risky than Mirriad Advertising. It trades about 0.09 of its potential returns per unit of risk. Mirriad Advertising plc is currently generating about -0.03 per unit of risk. If you would invest 25,262 in Microsoft on August 27, 2024 and sell it today you would earn a total of 16,438 from holding Microsoft or generate 65.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Mirriad Advertising plc
Performance |
| Timeline |
| Microsoft |
| Mirriad Advertising plc |
Microsoft and Mirriad Advertising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Mirriad Advertising
The main advantage of trading using opposite Microsoft and Mirriad Advertising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Mirriad Advertising 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 Mirriad Advertising will offset losses from the drop in Mirriad Advertising's long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Paysafe |
| Mirriad Advertising vs. INEO Tech Corp | Mirriad Advertising vs. Kidoz Inc | Mirriad Advertising vs. Marchex | Mirriad Advertising vs. Snipp Interactive |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |