Correlation Between Microsoft and ASHTEAD
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By analyzing existing cross correlation between Microsoft and ASHTEAD CAP INC, you can compare the effects of market volatilities on Microsoft and ASHTEAD 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 ASHTEAD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and ASHTEAD.
Diversification Opportunities for Microsoft and ASHTEAD
Significant diversification
The 3 months correlation between Microsoft and ASHTEAD is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and ASHTEAD CAP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASHTEAD CAP INC 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 ASHTEAD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASHTEAD CAP INC has no effect on the direction of Microsoft i.e., Microsoft and ASHTEAD go up and down completely randomly.
Pair Corralation between Microsoft and ASHTEAD
Given the investment horizon of 90 days Microsoft is expected to generate 1.88 times more return on investment than ASHTEAD. However, Microsoft is 1.88 times more volatile than ASHTEAD CAP INC. It trades about 0.05 of its potential returns per unit of risk. ASHTEAD CAP INC is currently generating about 0.0 per unit of risk. If you would invest 36,820 in Microsoft on September 2, 2024 and sell it today you would earn a total of 5,526 from holding Microsoft or generate 15.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 54.84% |
| Values | Daily Returns |
Microsoft vs. ASHTEAD CAP INC
Performance |
| Timeline |
| Microsoft |
| ASHTEAD CAP INC |
Microsoft and ASHTEAD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and ASHTEAD
The main advantage of trading using opposite Microsoft and ASHTEAD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, ASHTEAD 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 ASHTEAD will offset losses from the drop in ASHTEAD's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| ASHTEAD vs. China Tontine Wines | ASHTEAD vs. GAMCO Global Gold | ASHTEAD vs. Fidus Investment Corp | ASHTEAD vs. PennantPark Floating Rate |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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