Correlation Between Microsoft and International
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By analyzing existing cross correlation between Microsoft and International Game Technology, you can compare the effects of market volatilities on Microsoft and International 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 International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and International.
Diversification Opportunities for Microsoft and International
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Microsoft and International is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and International Game Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Game 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 International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Game has no effect on the direction of Microsoft i.e., Microsoft and International go up and down completely randomly.
Pair Corralation between Microsoft and International
Given the investment horizon of 90 days Microsoft is expected to under-perform the International. In addition to that, Microsoft is 4.94 times more volatile than International Game Technology. It trades about -0.21 of its total potential returns per unit of risk. International Game Technology is currently generating about -0.06 per unit of volatility. If you would invest 9,850 in International Game Technology on December 1, 2024 and sell it today you would lose (22.00) from holding International Game Technology or give up 0.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Microsoft vs. International Game Technology
Performance |
| Timeline |
| Microsoft |
| International Game |
Microsoft and International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and International
The main advantage of trading using opposite Microsoft and International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, International 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 International will offset losses from the drop in International's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Adobe Systems Incorporated | Microsoft vs. Crowdstrike Holdings |
| International vs. Omni Health | International vs. Sonida Senior Living | International vs. Falcon Metals Limited | International vs. Genfit |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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