Correlation Between Microsoft and Repay Holdings
Can any of the company-specific risk be diversified away by investing in both Microsoft and Repay Holdings 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 Repay Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Repay Holdings Corp, you can compare the effects of market volatilities on Microsoft and Repay Holdings 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 Repay Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Repay Holdings.
Diversification Opportunities for Microsoft and Repay Holdings
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Microsoft and Repay is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Repay Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Repay Holdings Corp 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 Repay Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Repay Holdings Corp has no effect on the direction of Microsoft i.e., Microsoft and Repay Holdings go up and down completely randomly.
Pair Corralation between Microsoft and Repay Holdings
Given the investment horizon of 90 days Microsoft is expected to under-perform the Repay Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Microsoft is 1.77 times less risky than Repay Holdings. The stock trades about -0.02 of its potential returns per unit of risk. The Repay Holdings Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 816.00 in Repay Holdings Corp on August 30, 2024 and sell it today you would lose (8.00) from holding Repay Holdings Corp or give up 0.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.73% |
| Values | Daily Returns |
Microsoft vs. Repay Holdings Corp
Performance |
| Timeline |
| Microsoft |
| Repay Holdings Corp |
Microsoft and Repay Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Repay Holdings
The main advantage of trading using opposite Microsoft and Repay Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Repay Holdings 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 Repay Holdings will offset losses from the drop in Repay Holdings' long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Repay Holdings vs. Global Blue Group | Repay Holdings vs. Optiva Inc | Repay Holdings vs. Sangoma Technologies Corp | Repay Holdings vs. Evertec |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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