Correlation Between Microsoft and TENCNT
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By analyzing existing cross correlation between Microsoft and TENCNT 3975 11 APR 29, you can compare the effects of market volatilities on Microsoft and TENCNT 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 TENCNT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and TENCNT.
Diversification Opportunities for Microsoft and TENCNT
Good diversification
The 3 months correlation between Microsoft and TENCNT is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and TENCNT 3975 11 APR 29 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TENCNT 75 11 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 TENCNT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TENCNT 75 11 has no effect on the direction of Microsoft i.e., Microsoft and TENCNT go up and down completely randomly.
Pair Corralation between Microsoft and TENCNT
Given the investment horizon of 90 days Microsoft is expected to generate 1.55 times more return on investment than TENCNT. However, Microsoft is 1.55 times more volatile than TENCNT 3975 11 APR 29. It trades about 0.03 of its potential returns per unit of risk. TENCNT 3975 11 APR 29 is currently generating about -0.31 per unit of risk. If you would invest 40,978 in Microsoft on August 28, 2024 and sell it today you would earn a total of 901.00 from holding Microsoft or generate 2.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 26.98% |
| Values | Daily Returns |
Microsoft vs. TENCNT 3975 11 APR 29
Performance |
| Timeline |
| Microsoft |
| TENCNT 75 11 |
Microsoft and TENCNT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and TENCNT
The main advantage of trading using opposite Microsoft and TENCNT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, TENCNT 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 TENCNT will offset losses from the drop in TENCNT's long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Paysafe |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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