Correlation Between Microsoft and Quantum EMotion
Can any of the company-specific risk be diversified away by investing in both Microsoft and Quantum EMotion 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 Quantum EMotion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Quantum eMotion, you can compare the effects of market volatilities on Microsoft and Quantum EMotion 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 Quantum EMotion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Quantum EMotion.
Diversification Opportunities for Microsoft and Quantum EMotion
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Microsoft and Quantum is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Quantum eMotion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantum eMotion 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 Quantum EMotion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantum eMotion has no effect on the direction of Microsoft i.e., Microsoft and Quantum EMotion go up and down completely randomly.
Pair Corralation between Microsoft and Quantum EMotion
Given the investment horizon of 90 days Microsoft is expected to generate 0.13 times more return on investment than Quantum EMotion. However, Microsoft is 7.68 times less risky than Quantum EMotion. It trades about -0.04 of its potential returns per unit of risk. Quantum eMotion is currently generating about -0.1 per unit of risk. If you would invest 42,335 in Microsoft on November 4, 2024 and sell it today you would lose (829.00) from holding Microsoft or give up 1.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Microsoft vs. Quantum eMotion
Performance |
| Timeline |
| Microsoft |
| Quantum eMotion |
Microsoft and Quantum EMotion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Quantum EMotion
The main advantage of trading using opposite Microsoft and Quantum EMotion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Quantum EMotion 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 Quantum EMotion will offset losses from the drop in Quantum EMotion's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Adobe Systems Incorporated | Microsoft vs. Crowdstrike Holdings |
| Quantum EMotion vs. QuickLogic | Quantum EMotion vs. Sequans Communications SA | Quantum EMotion vs. Semtech | Quantum EMotion vs. Valens |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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