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
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and SpringBig is -0.02. 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 9.27 times less return on investment than SpringBig Holdings. But when comparing it to its historical volatility, Microsoft is 14.95 times less risky than SpringBig Holdings. It trades about 0.09 of its potential returns per unit of risk. SpringBig Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5.00 in SpringBig Holdings on August 29, 2024 and sell it today you would lose (3.80) from holding SpringBig Holdings or give up 76.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 25.05% |
| 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. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Paysafe |
| SpringBig Holdings vs. Dave Warrants | SpringBig Holdings vs. SoundHound AI | SpringBig Holdings vs. Swvl Holdings Corp | SpringBig Holdings vs. WM Technology |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |