Correlation Between Microsoft and Convenience Foods
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By analyzing existing cross correlation between Microsoft and Convenience Foods PLC, you can compare the effects of market volatilities on Microsoft and Convenience Foods 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 Convenience Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Convenience Foods.
Diversification Opportunities for Microsoft and Convenience Foods
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microsoft and Convenience is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Convenience Foods PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Convenience Foods PLC 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 Convenience Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Convenience Foods PLC has no effect on the direction of Microsoft i.e., Microsoft and Convenience Foods go up and down completely randomly.
Pair Corralation between Microsoft and Convenience Foods
Given the investment horizon of 90 days Microsoft is expected to under-perform the Convenience Foods. In addition to that, Microsoft is 1.34 times more volatile than Convenience Foods PLC. It trades about -0.04 of its total potential returns per unit of risk. Convenience Foods PLC is currently generating about 0.33 per unit of volatility. If you would invest 82,325 in Convenience Foods PLC on August 31, 2024 and sell it today you would earn a total of 7,125 from holding Convenience Foods PLC or generate 8.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Microsoft vs. Convenience Foods PLC
Performance |
| Timeline |
| Microsoft |
| Convenience Foods PLC |
Microsoft and Convenience Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Convenience Foods
The main advantage of trading using opposite Microsoft and Convenience Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Convenience Foods 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 Convenience Foods will offset losses from the drop in Convenience Foods' long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Convenience Foods vs. HNB Finance | Convenience Foods vs. Prime Lands Residencies | Convenience Foods vs. Jat Holdings PLC | Convenience Foods vs. E M L |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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