Correlation Between Microsoft and Scienjoy Holding
Can any of the company-specific risk be diversified away by investing in both Microsoft and Scienjoy 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 Scienjoy Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Scienjoy Holding Corp, you can compare the effects of market volatilities on Microsoft and Scienjoy 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 Scienjoy Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Scienjoy Holding.
Diversification Opportunities for Microsoft and Scienjoy Holding
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microsoft and Scienjoy is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Scienjoy Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scienjoy Holding 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 Scienjoy Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scienjoy Holding Corp has no effect on the direction of Microsoft i.e., Microsoft and Scienjoy Holding go up and down completely randomly.
Pair Corralation between Microsoft and Scienjoy Holding
Given the investment horizon of 90 days Microsoft is expected to under-perform the Scienjoy Holding. But the stock apears to be less risky and, when comparing its historical volatility, Microsoft is 3.86 times less risky than Scienjoy Holding. The stock trades about -0.02 of its potential returns per unit of risk. The Scienjoy Holding Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 95.00 in Scienjoy Holding Corp on August 31, 2024 and sell it today you would lose (1.00) from holding Scienjoy Holding Corp or give up 1.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Scienjoy Holding Corp
Performance |
| Timeline |
| Microsoft |
| Scienjoy Holding Corp |
Microsoft and Scienjoy Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Scienjoy Holding
The main advantage of trading using opposite Microsoft and Scienjoy Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Scienjoy 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 Scienjoy Holding will offset losses from the drop in Scienjoy Holding's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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