Correlation Between Microsoft and CONSOLIDATED
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By analyzing existing cross correlation between Microsoft and CONSOLIDATED EDISON N, you can compare the effects of market volatilities on Microsoft and CONSOLIDATED 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 CONSOLIDATED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and CONSOLIDATED.
Diversification Opportunities for Microsoft and CONSOLIDATED
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microsoft and CONSOLIDATED is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and CONSOLIDATED EDISON N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONSOLIDATED EDISON 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 CONSOLIDATED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONSOLIDATED EDISON has no effect on the direction of Microsoft i.e., Microsoft and CONSOLIDATED go up and down completely randomly.
Pair Corralation between Microsoft and CONSOLIDATED
Given the investment horizon of 90 days Microsoft is expected to under-perform the CONSOLIDATED. But the stock apears to be less risky and, when comparing its historical volatility, Microsoft is 3.5 times less risky than CONSOLIDATED. The stock trades about -0.07 of its potential returns per unit of risk. The CONSOLIDATED EDISON N is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 7,611 in CONSOLIDATED EDISON N on October 24, 2024 and sell it today you would earn a total of 910.00 from holding CONSOLIDATED EDISON N or generate 11.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 50.0% |
| Values | Daily Returns |
Microsoft vs. CONSOLIDATED EDISON N
Performance |
| Timeline |
| Microsoft |
| CONSOLIDATED EDISON |
Microsoft and CONSOLIDATED Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and CONSOLIDATED
The main advantage of trading using opposite Microsoft and CONSOLIDATED positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, CONSOLIDATED 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 CONSOLIDATED will offset losses from the drop in CONSOLIDATED's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. BLOCK INC | Microsoft vs. Adobe Systems Incorporated |
| CONSOLIDATED vs. Turning Point Brands | CONSOLIDATED vs. Ambev SA ADR | CONSOLIDATED vs. Vita Coco | CONSOLIDATED vs. NorthWestern |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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