Correlation Between Microsoft and HOSPITALITY
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By analyzing existing cross correlation between Microsoft and HOSPITALITY PPTYS TR, you can compare the effects of market volatilities on Microsoft and HOSPITALITY 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 HOSPITALITY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and HOSPITALITY.
Diversification Opportunities for Microsoft and HOSPITALITY
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Microsoft and HOSPITALITY is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and HOSPITALITY PPTYS TR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOSPITALITY PPTYS 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 HOSPITALITY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HOSPITALITY PPTYS has no effect on the direction of Microsoft i.e., Microsoft and HOSPITALITY go up and down completely randomly.
Pair Corralation between Microsoft and HOSPITALITY
Given the investment horizon of 90 days Microsoft is expected to generate 1.12 times more return on investment than HOSPITALITY. However, Microsoft is 1.12 times more volatile than HOSPITALITY PPTYS TR. It trades about 0.06 of its potential returns per unit of risk. HOSPITALITY PPTYS TR is currently generating about 0.02 per unit of risk. If you would invest 36,854 in Microsoft on September 4, 2024 and sell it today you would earn a total of 6,244 from holding Microsoft or generate 16.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.34% |
| Values | Daily Returns |
Microsoft vs. HOSPITALITY PPTYS TR
Performance |
| Timeline |
| Microsoft |
| HOSPITALITY PPTYS |
Microsoft and HOSPITALITY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and HOSPITALITY
The main advantage of trading using opposite Microsoft and HOSPITALITY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, HOSPITALITY 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 HOSPITALITY will offset losses from the drop in HOSPITALITY's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| HOSPITALITY vs. Albertsons Companies | HOSPITALITY vs. NETGEAR | HOSPITALITY vs. NH Foods Ltd | HOSPITALITY vs. Supercom |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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