Correlation Between Microsoft and Peakstone Realty
Can any of the company-specific risk be diversified away by investing in both Microsoft and Peakstone Realty 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 Peakstone Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Peakstone Realty Trust, you can compare the effects of market volatilities on Microsoft and Peakstone Realty 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 Peakstone Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Peakstone Realty.
Diversification Opportunities for Microsoft and Peakstone Realty
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Microsoft and Peakstone is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Peakstone Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peakstone Realty Trust 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 Peakstone Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peakstone Realty Trust has no effect on the direction of Microsoft i.e., Microsoft and Peakstone Realty go up and down completely randomly.
Pair Corralation between Microsoft and Peakstone Realty
Given the investment horizon of 90 days Microsoft is expected to under-perform the Peakstone Realty. But the stock apears to be less risky and, when comparing its historical volatility, Microsoft is 1.08 times less risky than Peakstone Realty. The stock trades about -0.04 of its potential returns per unit of risk. The Peakstone Realty Trust is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,054 in Peakstone Realty Trust on November 9, 2024 and sell it today you would earn a total of 15.00 from holding Peakstone Realty Trust or generate 1.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Peakstone Realty Trust
Performance |
| Timeline |
| Microsoft |
| Peakstone Realty Trust |
Microsoft and Peakstone Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Peakstone Realty
The main advantage of trading using opposite Microsoft and Peakstone Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Peakstone Realty 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 Peakstone Realty will offset losses from the drop in Peakstone Realty's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Adobe Systems Incorporated | Microsoft vs. Crowdstrike Holdings |
| Peakstone Realty vs. Global Net Lease, | Peakstone Realty vs. Gladstone Commercial | Peakstone Realty vs. CTO Realty Growth | Peakstone Realty vs. W P Carey |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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