Correlation Between Microsoft and Sidomulyo Selaras
Can any of the company-specific risk be diversified away by investing in both Microsoft and Sidomulyo Selaras 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 Sidomulyo Selaras into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Sidomulyo Selaras Tbk, you can compare the effects of market volatilities on Microsoft and Sidomulyo Selaras 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 Sidomulyo Selaras. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Sidomulyo Selaras.
Diversification Opportunities for Microsoft and Sidomulyo Selaras
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Microsoft and Sidomulyo is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Sidomulyo Selaras Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sidomulyo Selaras Tbk 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 Sidomulyo Selaras. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sidomulyo Selaras Tbk has no effect on the direction of Microsoft i.e., Microsoft and Sidomulyo Selaras go up and down completely randomly.
Pair Corralation between Microsoft and Sidomulyo Selaras
Given the investment horizon of 90 days Microsoft is expected to generate 0.41 times more return on investment than Sidomulyo Selaras. However, Microsoft is 2.45 times less risky than Sidomulyo Selaras. It trades about 0.06 of its potential returns per unit of risk. Sidomulyo Selaras Tbk is currently generating about -0.05 per unit of risk. If you would invest 32,151 in Microsoft on August 31, 2024 and sell it today you would earn a total of 10,195 from holding Microsoft or generate 31.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Microsoft vs. Sidomulyo Selaras Tbk
Performance |
| Timeline |
| Microsoft |
| Sidomulyo Selaras Tbk |
Microsoft and Sidomulyo Selaras Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Sidomulyo Selaras
The main advantage of trading using opposite Microsoft and Sidomulyo Selaras positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Sidomulyo Selaras 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 Sidomulyo Selaras will offset losses from the drop in Sidomulyo Selaras' long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Sidomulyo Selaras vs. Matahari Department Store | Sidomulyo Selaras vs. Multi Medika Internasional | Sidomulyo Selaras vs. Visi Media Asia | Sidomulyo Selaras vs. Bayan Resources Tbk |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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