Correlation Between Microsoft and Osisko Gold
Can any of the company-specific risk be diversified away by investing in both Microsoft and Osisko Gold 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 Osisko Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Osisko Gold Ro, you can compare the effects of market volatilities on Microsoft and Osisko Gold 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 Osisko Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Osisko Gold.
Diversification Opportunities for Microsoft and Osisko Gold
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Microsoft and Osisko is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Osisko Gold Ro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osisko Gold Ro 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 Osisko Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osisko Gold Ro has no effect on the direction of Microsoft i.e., Microsoft and Osisko Gold go up and down completely randomly.
Pair Corralation between Microsoft and Osisko Gold
Given the investment horizon of 90 days Microsoft is expected to generate 0.76 times more return on investment than Osisko Gold. However, Microsoft is 1.32 times less risky than Osisko Gold. It trades about -0.04 of its potential returns per unit of risk. Osisko Gold Ro is currently generating about -0.14 per unit of risk. If you would invest 42,574 in Microsoft on August 28, 2024 and sell it today you would lose (695.00) from holding Microsoft or give up 1.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Osisko Gold Ro
Performance |
| Timeline |
| Microsoft |
| Osisko Gold Ro |
Microsoft and Osisko Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Osisko Gold
The main advantage of trading using opposite Microsoft and Osisko Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Osisko Gold 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 Osisko Gold will offset losses from the drop in Osisko Gold's long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Paysafe |
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.
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