Correlation Between Microsoft and ONEOK
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By analyzing existing cross correlation between Microsoft and ONEOK INC NEW, you can compare the effects of market volatilities on Microsoft and ONEOK 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 ONEOK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and ONEOK.
Diversification Opportunities for Microsoft and ONEOK
Good diversification
The 3 months correlation between Microsoft and ONEOK is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and ONEOK INC NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONEOK INC NEW 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 ONEOK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONEOK INC NEW has no effect on the direction of Microsoft i.e., Microsoft and ONEOK go up and down completely randomly.
Pair Corralation between Microsoft and ONEOK
Given the investment horizon of 90 days Microsoft is expected to generate 0.74 times more return on investment than ONEOK. However, Microsoft is 1.35 times less risky than ONEOK. It trades about 0.24 of its potential returns per unit of risk. ONEOK INC NEW is currently generating about -0.15 per unit of risk. If you would invest 40,764 in Microsoft on September 3, 2024 and sell it today you would earn a total of 2,334 from holding Microsoft or generate 5.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 75.0% |
| Values | Daily Returns |
Microsoft vs. ONEOK INC NEW
Performance |
| Timeline |
| Microsoft |
| ONEOK INC NEW |
Microsoft and ONEOK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and ONEOK
The main advantage of trading using opposite Microsoft and ONEOK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, ONEOK 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 ONEOK will offset losses from the drop in ONEOK'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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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