Correlation Between Microsoft and Secoo Holding
Can any of the company-specific risk be diversified away by investing in both Microsoft and Secoo Holding 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 Secoo Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Secoo Holding, you can compare the effects of market volatilities on Microsoft and Secoo Holding 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 Secoo Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Secoo Holding.
Diversification Opportunities for Microsoft and Secoo Holding
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Microsoft and Secoo is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Secoo Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Secoo Holding 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 Secoo Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Secoo Holding has no effect on the direction of Microsoft i.e., Microsoft and Secoo Holding go up and down completely randomly.
Pair Corralation between Microsoft and Secoo Holding
If you would invest 83.00 in Secoo Holding on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Secoo Holding or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Microsoft vs. Secoo Holding
Performance |
| Timeline |
| Microsoft |
| Secoo Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Microsoft and Secoo Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Secoo Holding
The main advantage of trading using opposite Microsoft and Secoo Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Secoo Holding 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 Secoo Holding will offset losses from the drop in Secoo Holding's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Secoo Holding vs. Kidpik Corp | Secoo Holding vs. Qurate Retail Series | Secoo Holding vs. Natural Health Trend | Secoo Holding vs. Liquidity Services |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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