Correlation Between Microsoft and FORTUNE
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By analyzing existing cross correlation between Microsoft and FORTUNE BRANDS INC, you can compare the effects of market volatilities on Microsoft and FORTUNE 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 FORTUNE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and FORTUNE.
Diversification Opportunities for Microsoft and FORTUNE
Significant diversification
The 3 months correlation between Microsoft and FORTUNE is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and FORTUNE BRANDS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FORTUNE BRANDS 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 FORTUNE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FORTUNE BRANDS INC has no effect on the direction of Microsoft i.e., Microsoft and FORTUNE go up and down completely randomly.
Pair Corralation between Microsoft and FORTUNE
Given the investment horizon of 90 days Microsoft is expected to generate 1.19 times more return on investment than FORTUNE. However, Microsoft is 1.19 times more volatile than FORTUNE BRANDS INC. It trades about -0.04 of its potential returns per unit of risk. FORTUNE BRANDS INC is currently generating about -0.44 per unit of risk. If you would invest 43,109 in Microsoft on August 30, 2024 and sell it today you would lose (810.00) from holding Microsoft or give up 1.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 31.82% |
| Values | Daily Returns |
Microsoft vs. FORTUNE BRANDS INC
Performance |
| Timeline |
| Microsoft |
| FORTUNE BRANDS INC |
Microsoft and FORTUNE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and FORTUNE
The main advantage of trading using opposite Microsoft and FORTUNE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, FORTUNE 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 FORTUNE will offset losses from the drop in FORTUNE's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| FORTUNE vs. AEP TEX INC | FORTUNE vs. US BANK NATIONAL | FORTUNE vs. Nasdaq Inc | FORTUNE vs. Vertiv Holdings Co |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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