Correlation Between Microsoft and APPLE
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By analyzing existing cross correlation between Microsoft and APPLE INC 245, you can compare the effects of market volatilities on Microsoft and APPLE 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 APPLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and APPLE.
Diversification Opportunities for Microsoft and APPLE
Average diversification
The 3 months correlation between Microsoft and APPLE is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and APPLE INC 245 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APPLE INC 245 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 APPLE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APPLE INC 245 has no effect on the direction of Microsoft i.e., Microsoft and APPLE go up and down completely randomly.
Pair Corralation between Microsoft and APPLE
Given the investment horizon of 90 days Microsoft is expected to generate 4.06 times more return on investment than APPLE. However, Microsoft is 4.06 times more volatile than APPLE INC 245. It trades about -0.05 of its potential returns per unit of risk. APPLE INC 245 is currently generating about -0.26 per unit of risk. If you would invest 42,574 in Microsoft on August 27, 2024 and sell it today you would lose (874.00) from holding Microsoft or give up 2.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Microsoft vs. APPLE INC 245
Performance |
| Timeline |
| Microsoft |
| APPLE INC 245 |
Microsoft and APPLE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and APPLE
The main advantage of trading using opposite Microsoft and APPLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, APPLE 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 APPLE will offset losses from the drop in APPLE's long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Paysafe |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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