Correlation Between Microsoft and Rapid Fire
Can any of the company-specific risk be diversified away by investing in both Microsoft and Rapid Fire 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 Rapid Fire into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Rapid Fire Marketing, you can compare the effects of market volatilities on Microsoft and Rapid Fire 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 Rapid Fire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Rapid Fire.
Diversification Opportunities for Microsoft and Rapid Fire
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Microsoft and Rapid is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Rapid Fire Marketing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rapid Fire Marketing 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 Rapid Fire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rapid Fire Marketing has no effect on the direction of Microsoft i.e., Microsoft and Rapid Fire go up and down completely randomly.
Pair Corralation between Microsoft and Rapid Fire
If you would invest 23,595 in Microsoft on September 20, 2024 and sell it today you would earn a total of 20,648 from holding Microsoft or generate 87.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Microsoft vs. Rapid Fire Marketing
Performance |
| Timeline |
| Microsoft |
| Rapid Fire Marketing |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Microsoft and Rapid Fire Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Rapid Fire
The main advantage of trading using opposite Microsoft and Rapid Fire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Rapid Fire 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 Rapid Fire will offset losses from the drop in Rapid Fire's long position.| Microsoft vs. Global Blue Group | Microsoft vs. Aurora Mobile | Microsoft vs. Marqeta | Microsoft vs. Nextnav Acquisition Corp |
| Rapid Fire vs. Toro Co | Rapid Fire vs. Edgewell Personal Care | Rapid Fire vs. Compania Cervecerias Unidas | Rapid Fire vs. Beauty Health Co |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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