Correlation Between Microsoft and SpringBig Holdings
Can any of the company-specific risk be diversified away by investing in both Microsoft and SpringBig 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 SpringBig Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and SpringBig Holdings, you can compare the effects of market volatilities on Microsoft and SpringBig 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 SpringBig Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and SpringBig Holdings.
Diversification Opportunities for Microsoft and SpringBig Holdings
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and SpringBig is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and SpringBig Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SpringBig Holdings 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 SpringBig Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SpringBig Holdings has no effect on the direction of Microsoft i.e., Microsoft and SpringBig Holdings go up and down completely randomly.
Pair Corralation between Microsoft and SpringBig Holdings
Given the investment horizon of 90 days Microsoft is expected to generate 0.14 times more return on investment than SpringBig Holdings. However, Microsoft is 6.94 times less risky than SpringBig Holdings. It trades about 0.08 of its potential returns per unit of risk. SpringBig Holdings is currently generating about -0.01 per unit of risk. If you would invest 24,616 in Microsoft on August 25, 2024 and sell it today you would earn a total of 17,084 from holding Microsoft or generate 69.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 32.06% |
| Values | Daily Returns |
Microsoft vs. SpringBig Holdings
Performance |
| Timeline |
| Microsoft |
| SpringBig Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Microsoft and SpringBig Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and SpringBig Holdings
The main advantage of trading using opposite Microsoft and SpringBig Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, SpringBig 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 SpringBig Holdings will offset losses from the drop in SpringBig Holdings' long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| SpringBig Holdings vs. OLB Group | SpringBig Holdings vs. Friendable | SpringBig Holdings vs. LifeSpeak | SpringBig Holdings vs. Creative Realities |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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