Correlation Between Microsoft and PropertyGuru
Can any of the company-specific risk be diversified away by investing in both Microsoft and PropertyGuru 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 PropertyGuru into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and PropertyGuru Group, you can compare the effects of market volatilities on Microsoft and PropertyGuru 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 PropertyGuru. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and PropertyGuru.
Diversification Opportunities for Microsoft and PropertyGuru
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Microsoft and PropertyGuru is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and PropertyGuru Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PropertyGuru 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 PropertyGuru. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PropertyGuru Group has no effect on the direction of Microsoft i.e., Microsoft and PropertyGuru go up and down completely randomly.
Pair Corralation between Microsoft and PropertyGuru
Given the investment horizon of 90 days Microsoft is expected to under-perform the PropertyGuru. In addition to that, Microsoft is 13.31 times more volatile than PropertyGuru Group. It trades about -0.04 of its total potential returns per unit of risk. PropertyGuru Group is currently generating about 0.11 per unit of volatility. If you would invest 663.00 in PropertyGuru Group on August 31, 2024 and sell it today you would earn a total of 2.00 from holding PropertyGuru Group or generate 0.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. PropertyGuru Group
Performance |
| Timeline |
| Microsoft |
| PropertyGuru Group |
Microsoft and PropertyGuru Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and PropertyGuru
The main advantage of trading using opposite Microsoft and PropertyGuru positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, PropertyGuru 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 PropertyGuru will offset losses from the drop in PropertyGuru's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| PropertyGuru vs. Comscore | PropertyGuru vs. Cheetah Mobile | PropertyGuru vs. EverQuote Class A | PropertyGuru vs. DouYu International Holdings |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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