Correlation Between Microsoft and OPEN HOUSE
Can any of the company-specific risk be diversified away by investing in both Microsoft and OPEN HOUSE 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 OPEN HOUSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and OPEN HOUSE GROUP, you can compare the effects of market volatilities on Microsoft and OPEN HOUSE 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 OPEN HOUSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and OPEN HOUSE.
Diversification Opportunities for Microsoft and OPEN HOUSE
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and OPEN is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and OPEN HOUSE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPEN HOUSE GROUP 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 OPEN HOUSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPEN HOUSE GROUP has no effect on the direction of Microsoft i.e., Microsoft and OPEN HOUSE go up and down completely randomly.
Pair Corralation between Microsoft and OPEN HOUSE
Given the investment horizon of 90 days Microsoft is expected to generate 2.64 times less return on investment than OPEN HOUSE. But when comparing it to its historical volatility, Microsoft is 1.82 times less risky than OPEN HOUSE. It trades about 0.04 of its potential returns per unit of risk. OPEN HOUSE GROUP is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,600 in OPEN HOUSE GROUP on August 25, 2024 and sell it today you would earn a total of 860.00 from holding OPEN HOUSE GROUP or generate 33.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.28% |
| Values | Daily Returns |
Microsoft vs. OPEN HOUSE GROUP
Performance |
| Timeline |
| Microsoft |
| OPEN HOUSE GROUP |
Microsoft and OPEN HOUSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and OPEN HOUSE
The main advantage of trading using opposite Microsoft and OPEN HOUSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, OPEN HOUSE 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 OPEN HOUSE will offset losses from the drop in OPEN HOUSE's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| OPEN HOUSE vs. Superior Plus Corp | OPEN HOUSE vs. NMI Holdings | OPEN HOUSE vs. Origin Agritech | OPEN HOUSE vs. SIVERS SEMICONDUCTORS 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |