Correlation Between Microsoft and Elsaeed Contracting
Can any of the company-specific risk be diversified away by investing in both Microsoft and Elsaeed Contracting 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 Elsaeed Contracting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Elsaeed Contracting Real, you can compare the effects of market volatilities on Microsoft and Elsaeed Contracting 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 Elsaeed Contracting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Elsaeed Contracting.
Diversification Opportunities for Microsoft and Elsaeed Contracting
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Microsoft and Elsaeed is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Elsaeed Contracting Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elsaeed Contracting Real 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 Elsaeed Contracting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elsaeed Contracting Real has no effect on the direction of Microsoft i.e., Microsoft and Elsaeed Contracting go up and down completely randomly.
Pair Corralation between Microsoft and Elsaeed Contracting
Given the investment horizon of 90 days Microsoft is expected to generate 2.55 times less return on investment than Elsaeed Contracting. But when comparing it to its historical volatility, Microsoft is 2.21 times less risky than Elsaeed Contracting. It trades about 0.07 of its potential returns per unit of risk. Elsaeed Contracting Real is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 64.00 in Elsaeed Contracting Real on September 3, 2024 and sell it today you would earn a total of 34.00 from holding Elsaeed Contracting Real or generate 53.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 78.06% |
| Values | Daily Returns |
Microsoft vs. Elsaeed Contracting Real
Performance |
| Timeline |
| Microsoft |
| Elsaeed Contracting Real |
Microsoft and Elsaeed Contracting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Elsaeed Contracting
The main advantage of trading using opposite Microsoft and Elsaeed Contracting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Elsaeed Contracting 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 Elsaeed Contracting will offset losses from the drop in Elsaeed Contracting'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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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