Correlation Between Microsoft and TELE2 -B-
Can any of the company-specific risk be diversified away by investing in both Microsoft and TELE2 -B- 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 TELE2 -B- into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and TELE2 B , you can compare the effects of market volatilities on Microsoft and TELE2 -B- 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 TELE2 -B-. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and TELE2 -B-.
Diversification Opportunities for Microsoft and TELE2 -B-
Excellent diversification
The 3 months correlation between Microsoft and TELE2 is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and TELE2 B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TELE2 -B- 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 TELE2 -B-. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TELE2 -B- has no effect on the direction of Microsoft i.e., Microsoft and TELE2 -B- go up and down completely randomly.
Pair Corralation between Microsoft and TELE2 -B-
Given the investment horizon of 90 days Microsoft is expected to generate 6.28 times less return on investment than TELE2 -B-. But when comparing it to its historical volatility, Microsoft is 4.08 times less risky than TELE2 -B-. It trades about 0.06 of its potential returns per unit of risk. TELE2 B is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 120.00 in TELE2 B on December 7, 2024 and sell it today you would earn a total of 987.00 from holding TELE2 B or generate 822.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.6% |
| Values | Daily Returns |
Microsoft vs. TELE2 B
Performance |
| Timeline |
| Microsoft |
| TELE2 -B- |
Microsoft and TELE2 -B- Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and TELE2 -B-
The main advantage of trading using opposite Microsoft and TELE2 -B- positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, TELE2 -B- 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 TELE2 -B- will offset losses from the drop in TELE2 -B-'s long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Adobe Systems Incorporated | Microsoft vs. Crowdstrike Holdings |
| TELE2 -B- vs. ZhongAn Online P | TELE2 -B- vs. Wizz Air Holdings | TELE2 -B- vs. REVO INSURANCE SPA | TELE2 -B- vs. LAir Liquide SA |
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 Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |