Correlation Between Microsoft and Mogo
Can any of the company-specific risk be diversified away by investing in both Microsoft and Mogo 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 Mogo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Mogo Inc, you can compare the effects of market volatilities on Microsoft and Mogo 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 Mogo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Mogo.
Diversification Opportunities for Microsoft and Mogo
Good diversification
The 3 months correlation between Microsoft and Mogo is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Mogo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mogo Inc 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 Mogo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mogo Inc has no effect on the direction of Microsoft i.e., Microsoft and Mogo go up and down completely randomly.
Pair Corralation between Microsoft and Mogo
Given the investment horizon of 90 days Microsoft is expected to under-perform the Mogo. But the stock apears to be less risky and, when comparing its historical volatility, Microsoft is 4.37 times less risky than Mogo. The stock trades about -0.06 of its potential returns per unit of risk. The Mogo Inc is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 102.00 in Mogo Inc on August 24, 2024 and sell it today you would earn a total of 50.00 from holding Mogo Inc or generate 49.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Mogo Inc
Performance |
| Timeline |
| Microsoft |
| Mogo Inc |
Microsoft and Mogo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Mogo
The main advantage of trading using opposite Microsoft and Mogo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Mogo 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 Mogo will offset losses from the drop in Mogo's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Mogo vs. Katapult Holdings Equity | Mogo vs. International Money Express | Mogo vs. Bakkt Holdings | Mogo vs. Kaltura |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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