Correlation Between Microsoft and Guna Timur
Can any of the company-specific risk be diversified away by investing in both Microsoft and Guna Timur 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 Guna Timur into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Guna Timur Raya, you can compare the effects of market volatilities on Microsoft and Guna Timur 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 Guna Timur. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Guna Timur.
Diversification Opportunities for Microsoft and Guna Timur
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Microsoft and Guna is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Guna Timur Raya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guna Timur Raya 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 Guna Timur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guna Timur Raya has no effect on the direction of Microsoft i.e., Microsoft and Guna Timur go up and down completely randomly.
Pair Corralation between Microsoft and Guna Timur
Given the investment horizon of 90 days Microsoft is expected to generate 0.38 times more return on investment than Guna Timur. However, Microsoft is 2.66 times less risky than Guna Timur. It trades about 0.06 of its potential returns per unit of risk. Guna Timur Raya is currently generating about 0.01 per unit of risk. If you would invest 32,151 in Microsoft on August 31, 2024 and sell it today you would earn a total of 10,195 from holding Microsoft or generate 31.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.72% |
| Values | Daily Returns |
Microsoft vs. Guna Timur Raya
Performance |
| Timeline |
| Microsoft |
| Guna Timur Raya |
Microsoft and Guna Timur Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Guna Timur
The main advantage of trading using opposite Microsoft and Guna Timur positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Guna Timur 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 Guna Timur will offset losses from the drop in Guna Timur's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Guna Timur vs. Sriwahana | Guna Timur vs. PT Trimuda Nuansa | Guna Timur vs. Yelooo Integra Datanet | Guna Timur vs. Transcoal Pacific Tbk |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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