Correlation Between Microsoft and Aberdeen Singapore
Can any of the company-specific risk be diversified away by investing in both Microsoft and Aberdeen Singapore 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 Aberdeen Singapore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Aberdeen Singapore, you can compare the effects of market volatilities on Microsoft and Aberdeen Singapore 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 Aberdeen Singapore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Aberdeen Singapore.
Diversification Opportunities for Microsoft and Aberdeen Singapore
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Microsoft and Aberdeen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Aberdeen Singapore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Singapore 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 Aberdeen Singapore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Singapore has no effect on the direction of Microsoft i.e., Microsoft and Aberdeen Singapore go up and down completely randomly.
Pair Corralation between Microsoft and Aberdeen Singapore
If you would invest 26,128 in Microsoft on December 4, 2024 and sell it today you would earn a total of 12,292 from holding Microsoft or generate 47.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Microsoft vs. Aberdeen Singapore
Performance |
| Timeline |
| Microsoft |
| Aberdeen Singapore |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Microsoft and Aberdeen Singapore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Aberdeen Singapore
The main advantage of trading using opposite Microsoft and Aberdeen Singapore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Aberdeen Singapore 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 Aberdeen Singapore will offset losses from the drop in Aberdeen Singapore's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Adobe Systems Incorporated | Microsoft vs. Crowdstrike Holdings |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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