Correlation Between Microsoft and Sunworks
Can any of the company-specific risk be diversified away by investing in both Microsoft and Sunworks 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 Sunworks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Sunworks, you can compare the effects of market volatilities on Microsoft and Sunworks 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 Sunworks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Sunworks.
Diversification Opportunities for Microsoft and Sunworks
Good diversification
The 3 months correlation between Microsoft and Sunworks is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Sunworks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunworks 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 Sunworks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunworks has no effect on the direction of Microsoft i.e., Microsoft and Sunworks go up and down completely randomly.
Pair Corralation between Microsoft and Sunworks
If you would invest 162.00 in Sunworks on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Sunworks or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 2.27% |
| Values | Daily Returns |
Microsoft vs. Sunworks
Performance |
| Timeline |
| Microsoft |
| Sunworks |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Microsoft and Sunworks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Sunworks
The main advantage of trading using opposite Microsoft and Sunworks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Sunworks 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 Sunworks will offset losses from the drop in Sunworks' long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Sunworks vs. Sunrun Inc | Sunworks vs. Maxeon Solar Technologies | Sunworks vs. Canadian Solar | Sunworks vs. First Solar |
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 CEOs Directory module to screen CEOs from public companies around the world.
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