Correlation Between Microsoft and PHILIP
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By analyzing existing cross correlation between Microsoft and PHILIP MORRIS INTL, you can compare the effects of market volatilities on Microsoft and PHILIP 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 PHILIP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and PHILIP.
Diversification Opportunities for Microsoft and PHILIP
Pay attention - limited upside
The 3 months correlation between Microsoft and PHILIP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and PHILIP MORRIS INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHILIP MORRIS INTL 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 PHILIP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHILIP MORRIS INTL has no effect on the direction of Microsoft i.e., Microsoft and PHILIP go up and down completely randomly.
Pair Corralation between Microsoft and PHILIP
Given the investment horizon of 90 days Microsoft is expected to generate 1.32 times more return on investment than PHILIP. However, Microsoft is 1.32 times more volatile than PHILIP MORRIS INTL. It trades about 0.05 of its potential returns per unit of risk. PHILIP MORRIS INTL is currently generating about 0.0 per unit of risk. If you would invest 36,820 in Microsoft on September 2, 2024 and sell it today you would earn a total of 5,526 from holding Microsoft or generate 15.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.39% |
| Values | Daily Returns |
Microsoft vs. PHILIP MORRIS INTL
Performance |
| Timeline |
| Microsoft |
| PHILIP MORRIS INTL |
Microsoft and PHILIP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and PHILIP
The main advantage of trading using opposite Microsoft and PHILIP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, PHILIP 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 PHILIP will offset losses from the drop in PHILIP'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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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