Correlation Between Microsoft and Ardagh
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By analyzing existing cross correlation between Microsoft and Ardagh Packaging Finance, you can compare the effects of market volatilities on Microsoft and Ardagh 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 Ardagh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Ardagh.
Diversification Opportunities for Microsoft and Ardagh
Good diversification
The 3 months correlation between Microsoft and Ardagh is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Ardagh Packaging Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ardagh Packaging Finance 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 Ardagh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ardagh Packaging Finance has no effect on the direction of Microsoft i.e., Microsoft and Ardagh go up and down completely randomly.
Pair Corralation between Microsoft and Ardagh
Given the investment horizon of 90 days Microsoft is expected to generate 17.29 times less return on investment than Ardagh. But when comparing it to its historical volatility, Microsoft is 4.02 times less risky than Ardagh. It trades about 0.02 of its potential returns per unit of risk. Ardagh Packaging Finance is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 5,823 in Ardagh Packaging Finance on September 2, 2024 and sell it today you would earn a total of 1,777 from holding Ardagh Packaging Finance or generate 30.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 67.46% |
| Values | Daily Returns |
Microsoft vs. Ardagh Packaging Finance
Performance |
| Timeline |
| Microsoft |
| Ardagh Packaging Finance |
Microsoft and Ardagh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Ardagh
The main advantage of trading using opposite Microsoft and Ardagh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Ardagh 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 Ardagh will offset losses from the drop in Ardagh's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Ardagh vs. Playtika Holding Corp | Ardagh vs. NextNav Warrant | Ardagh vs. Xponential Fitness | Ardagh vs. Emerson Radio |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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