Correlation Between Microsoft and Strategem Capital
Can any of the company-specific risk be diversified away by investing in both Microsoft and Strategem Capital 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 Strategem Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Strategem Capital Corp, you can compare the effects of market volatilities on Microsoft and Strategem Capital 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 Strategem Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Strategem Capital.
Diversification Opportunities for Microsoft and Strategem Capital
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Microsoft and Strategem is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Strategem Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategem Capital Corp 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 Strategem Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategem Capital Corp has no effect on the direction of Microsoft i.e., Microsoft and Strategem Capital go up and down completely randomly.
Pair Corralation between Microsoft and Strategem Capital
Given the investment horizon of 90 days Microsoft is expected to generate 0.46 times more return on investment than Strategem Capital. However, Microsoft is 2.19 times less risky than Strategem Capital. It trades about 0.09 of its potential returns per unit of risk. Strategem Capital Corp is currently generating about -0.05 per unit of risk. If you would invest 25,262 in Microsoft on August 27, 2024 and sell it today you would earn a total of 16,438 from holding Microsoft or generate 65.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Microsoft vs. Strategem Capital Corp
Performance |
| Timeline |
| Microsoft |
| Strategem Capital Corp |
Microsoft and Strategem Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Strategem Capital
The main advantage of trading using opposite Microsoft and Strategem Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Strategem Capital 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 Strategem Capital will offset losses from the drop in Strategem Capital's long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Paysafe |
| Strategem Capital vs. NVIDIA CDR | Strategem Capital vs. Apple Inc CDR | Strategem Capital vs. Microsoft Corp CDR | Strategem Capital vs. Amazon CDR |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |