Correlation Between Microsoft and Spectaire Holdings
Can any of the company-specific risk be diversified away by investing in both Microsoft and Spectaire Holdings 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 Spectaire Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Spectaire Holdings, you can compare the effects of market volatilities on Microsoft and Spectaire Holdings 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 Spectaire Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Spectaire Holdings.
Diversification Opportunities for Microsoft and Spectaire Holdings
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microsoft and Spectaire is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Spectaire Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectaire Holdings 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 Spectaire Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectaire Holdings has no effect on the direction of Microsoft i.e., Microsoft and Spectaire Holdings go up and down completely randomly.
Pair Corralation between Microsoft and Spectaire Holdings
Given the investment horizon of 90 days Microsoft is expected to generate 0.09 times more return on investment than Spectaire Holdings. However, Microsoft is 11.21 times less risky than Spectaire Holdings. It trades about 0.02 of its potential returns per unit of risk. Spectaire Holdings is currently generating about -0.13 per unit of risk. If you would invest 42,240 in Microsoft on September 3, 2024 and sell it today you would earn a total of 858.00 from holding Microsoft or generate 2.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 38.4% |
| Values | Daily Returns |
Microsoft vs. Spectaire Holdings
Performance |
| Timeline |
| Microsoft |
| Spectaire Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Microsoft and Spectaire Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Spectaire Holdings
The main advantage of trading using opposite Microsoft and Spectaire Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Spectaire Holdings 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 Spectaire Holdings will offset losses from the drop in Spectaire Holdings' long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Spectaire Holdings vs. Sweetgreen | Spectaire Holdings vs. Kaltura | Spectaire Holdings vs. The Wendys Co | Spectaire Holdings vs. NextNav Warrant |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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