Correlation Between Microsoft and OKYO Pharma
Can any of the company-specific risk be diversified away by investing in both Microsoft and OKYO Pharma 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 OKYO Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and OKYO Pharma Ltd, you can compare the effects of market volatilities on Microsoft and OKYO Pharma 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 OKYO Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and OKYO Pharma.
Diversification Opportunities for Microsoft and OKYO Pharma
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and OKYO is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and OKYO Pharma Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OKYO Pharma 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 OKYO Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OKYO Pharma has no effect on the direction of Microsoft i.e., Microsoft and OKYO Pharma go up and down completely randomly.
Pair Corralation between Microsoft and OKYO Pharma
Given the investment horizon of 90 days Microsoft is expected to generate 0.75 times more return on investment than OKYO Pharma. However, Microsoft is 1.33 times less risky than OKYO Pharma. It trades about -0.04 of its potential returns per unit of risk. OKYO Pharma Ltd is currently generating about -0.13 per unit of risk. If you would invest 43,109 in Microsoft on August 30, 2024 and sell it today you would lose (810.00) from holding Microsoft or give up 1.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Microsoft vs. OKYO Pharma Ltd
Performance |
| Timeline |
| Microsoft |
| OKYO Pharma |
Microsoft and OKYO Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and OKYO Pharma
The main advantage of trading using opposite Microsoft and OKYO Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, OKYO Pharma 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 OKYO Pharma will offset losses from the drop in OKYO Pharma's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| OKYO Pharma vs. Candel Therapeutics | OKYO Pharma vs. Anebulo Pharmaceuticals | OKYO Pharma vs. Cingulate Warrants | OKYO Pharma vs. Unicycive Therapeutics |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |