Correlation Between Microsoft and AERCAP
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By analyzing existing cross correlation between Microsoft and AERCAP IRELAND CAP, you can compare the effects of market volatilities on Microsoft and AERCAP 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 AERCAP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and AERCAP.
Diversification Opportunities for Microsoft and AERCAP
Average diversification
The 3 months correlation between Microsoft and AERCAP is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and AERCAP IRELAND CAP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AERCAP IRELAND CAP 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 AERCAP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AERCAP IRELAND CAP has no effect on the direction of Microsoft i.e., Microsoft and AERCAP go up and down completely randomly.
Pair Corralation between Microsoft and AERCAP
Given the investment horizon of 90 days Microsoft is expected to generate 2.96 times more return on investment than AERCAP. However, Microsoft is 2.96 times more volatile than AERCAP IRELAND CAP. It trades about 0.08 of its potential returns per unit of risk. AERCAP IRELAND CAP is currently generating about 0.0 per unit of risk. If you would invest 24,616 in Microsoft on August 24, 2024 and sell it today you would earn a total of 17,084 from holding Microsoft or generate 69.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 92.74% |
| Values | Daily Returns |
Microsoft vs. AERCAP IRELAND CAP
Performance |
| Timeline |
| Microsoft |
| AERCAP IRELAND CAP |
Microsoft and AERCAP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and AERCAP
The main advantage of trading using opposite Microsoft and AERCAP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, AERCAP 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 AERCAP will offset losses from the drop in AERCAP's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| AERCAP vs. AEP TEX INC | AERCAP vs. US BANK NATIONAL | AERCAP vs. Eat Beyond Global | AERCAP vs. Charles Schwab Corp |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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