Correlation Between Microsoft and Santhera Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Microsoft and Santhera Pharmaceuticals 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 Santhera Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Santhera Pharmaceuticals Holding, you can compare the effects of market volatilities on Microsoft and Santhera Pharmaceuticals 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 Santhera Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Santhera Pharmaceuticals.
Diversification Opportunities for Microsoft and Santhera Pharmaceuticals
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Microsoft and Santhera is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Santhera Pharmaceuticals Holdi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santhera Pharmaceuticals 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 Santhera Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santhera Pharmaceuticals has no effect on the direction of Microsoft i.e., Microsoft and Santhera Pharmaceuticals go up and down completely randomly.
Pair Corralation between Microsoft and Santhera Pharmaceuticals
Given the investment horizon of 90 days Microsoft is expected to generate 0.82 times more return on investment than Santhera Pharmaceuticals. However, Microsoft is 1.22 times less risky than Santhera Pharmaceuticals. It trades about -0.04 of its potential returns per unit of risk. Santhera Pharmaceuticals Holding is currently generating about -0.26 per unit of risk. If you would invest 42,388 in Microsoft on August 25, 2024 and sell it today you would lose (688.00) from holding Microsoft or give up 1.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Santhera Pharmaceuticals Holdi
Performance |
| Timeline |
| Microsoft |
| Santhera Pharmaceuticals |
Microsoft and Santhera Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Santhera Pharmaceuticals
The main advantage of trading using opposite Microsoft and Santhera Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Santhera Pharmaceuticals 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 Santhera Pharmaceuticals will offset losses from the drop in Santhera Pharmaceuticals' long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Santhera Pharmaceuticals vs. Basilea Pharmaceutica AG | Santhera Pharmaceuticals vs. Idorsia | Santhera Pharmaceuticals vs. Newron Pharmaceuticals SpA | Santhera Pharmaceuticals vs. Evolva Holding SA |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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