Correlation Between Microsoft and EXELON
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By analyzing existing cross correlation between Microsoft and EXELON GENERATION LLC, you can compare the effects of market volatilities on Microsoft and EXELON 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 EXELON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and EXELON.
Diversification Opportunities for Microsoft and EXELON
Significant diversification
The 3 months correlation between Microsoft and EXELON is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and EXELON GENERATION LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EXELON GENERATION LLC 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 EXELON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EXELON GENERATION LLC has no effect on the direction of Microsoft i.e., Microsoft and EXELON go up and down completely randomly.
Pair Corralation between Microsoft and EXELON
Given the investment horizon of 90 days Microsoft is expected to generate 1.68 times more return on investment than EXELON. However, Microsoft is 1.68 times more volatile than EXELON GENERATION LLC. It trades about -0.04 of its potential returns per unit of risk. EXELON GENERATION LLC is currently generating about -0.19 per unit of risk. If you would invest 43,167 in Microsoft on August 31, 2024 and sell it today you would lose (868.00) from holding Microsoft or give up 2.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 77.27% |
| Values | Daily Returns |
Microsoft vs. EXELON GENERATION LLC
Performance |
| Timeline |
| Microsoft |
| EXELON GENERATION LLC |
Microsoft and EXELON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and EXELON
The main advantage of trading using opposite Microsoft and EXELON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, EXELON 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 EXELON will offset losses from the drop in EXELON's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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