Correlation Between Microsoft and 26441CAT2
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By analyzing existing cross correlation between Microsoft and DUKE ENERGY P, you can compare the effects of market volatilities on Microsoft and 26441CAT2 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 26441CAT2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and 26441CAT2.
Diversification Opportunities for Microsoft and 26441CAT2
Weak diversification
The 3 months correlation between Microsoft and 26441CAT2 is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and DUKE ENERGY P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DUKE ENERGY P 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 26441CAT2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DUKE ENERGY P has no effect on the direction of Microsoft i.e., Microsoft and 26441CAT2 go up and down completely randomly.
Pair Corralation between Microsoft and 26441CAT2
Given the investment horizon of 90 days Microsoft is expected to generate 1.16 times more return on investment than 26441CAT2. However, Microsoft is 1.16 times more volatile than DUKE ENERGY P. It trades about 0.05 of its potential returns per unit of risk. DUKE ENERGY P is currently generating about 0.01 per unit of risk. If you would invest 40,862 in Microsoft on August 31, 2024 and sell it today you would earn a total of 1,437 from holding Microsoft or generate 3.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.83% |
| Values | Daily Returns |
Microsoft vs. DUKE ENERGY P
Performance |
| Timeline |
| Microsoft |
| DUKE ENERGY P |
Microsoft and 26441CAT2 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and 26441CAT2
The main advantage of trading using opposite Microsoft and 26441CAT2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, 26441CAT2 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 26441CAT2 will offset losses from the drop in 26441CAT2's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| 26441CAT2 vs. Cedar Realty Trust | 26441CAT2 vs. RCI Hospitality Holdings | 26441CAT2 vs. GEN Restaurant Group, | 26441CAT2 vs. Dominos Pizza |
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