Correlation Between Microsoft and Sileon AB
Can any of the company-specific risk be diversified away by investing in both Microsoft and Sileon AB 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 Sileon AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Sileon AB, you can compare the effects of market volatilities on Microsoft and Sileon AB 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 Sileon AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Sileon AB.
Diversification Opportunities for Microsoft and Sileon AB
Very good diversification
The 3 months correlation between Microsoft and Sileon is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Sileon AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sileon AB 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 Sileon AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sileon AB has no effect on the direction of Microsoft i.e., Microsoft and Sileon AB go up and down completely randomly.
Pair Corralation between Microsoft and Sileon AB
Given the investment horizon of 90 days Microsoft is expected to generate 0.22 times more return on investment than Sileon AB. However, Microsoft is 4.49 times less risky than Sileon AB. It trades about 0.09 of its potential returns per unit of risk. Sileon AB is currently generating about -0.07 per unit of risk. If you would invest 23,571 in Microsoft on September 24, 2024 and sell it today you would earn a total of 20,089 from holding Microsoft or generate 85.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Microsoft vs. Sileon AB
Performance |
| Timeline |
| Microsoft |
| Sileon AB |
Microsoft and Sileon AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Sileon AB
The main advantage of trading using opposite Microsoft and Sileon AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Sileon AB 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 Sileon AB will offset losses from the drop in Sileon AB's long position.| Microsoft vs. BlackBerry | Microsoft vs. Global Blue Group | Microsoft vs. Aurora Mobile | Microsoft vs. Marqeta |
| Sileon AB vs. Enersize Oy | Sileon AB vs. Divio Technologies AB | Sileon AB vs. Mekonomen AB | Sileon AB vs. Embellence Group AB |
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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