Correlation Between Microsoft and OPUS GLOBAL
Can any of the company-specific risk be diversified away by investing in both Microsoft and OPUS GLOBAL 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 OPUS GLOBAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and OPUS GLOBAL Nyrt, you can compare the effects of market volatilities on Microsoft and OPUS GLOBAL 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 OPUS GLOBAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and OPUS GLOBAL.
Diversification Opportunities for Microsoft and OPUS GLOBAL
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Microsoft and OPUS is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and OPUS GLOBAL Nyrt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPUS GLOBAL Nyrt 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 OPUS GLOBAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPUS GLOBAL Nyrt has no effect on the direction of Microsoft i.e., Microsoft and OPUS GLOBAL go up and down completely randomly.
Pair Corralation between Microsoft and OPUS GLOBAL
Given the investment horizon of 90 days Microsoft is expected to generate 2.52 times less return on investment than OPUS GLOBAL. But when comparing it to its historical volatility, Microsoft is 1.13 times less risky than OPUS GLOBAL. It trades about 0.04 of its potential returns per unit of risk. OPUS GLOBAL Nyrt is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 37,282 in OPUS GLOBAL Nyrt on August 27, 2024 and sell it today you would earn a total of 13,518 from holding OPUS GLOBAL Nyrt or generate 36.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.79% |
| Values | Daily Returns |
Microsoft vs. OPUS GLOBAL Nyrt
Performance |
| Timeline |
| Microsoft |
| OPUS GLOBAL Nyrt |
Microsoft and OPUS GLOBAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and OPUS GLOBAL
The main advantage of trading using opposite Microsoft and OPUS GLOBAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, OPUS GLOBAL 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 OPUS GLOBAL will offset losses from the drop in OPUS GLOBAL's long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Rapid7 Inc |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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