Correlation Between Microsoft and WESTERN ACQUISITION
Can any of the company-specific risk be diversified away by investing in both Microsoft and WESTERN ACQUISITION at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Microsoft and WESTERN ACQUISITION into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and WESTERN ACQUISITION VENTURES, you can compare the effects of market volatilities on Microsoft and WESTERN ACQUISITION 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 WESTERN ACQUISITION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and WESTERN ACQUISITION.
Diversification Opportunities for Microsoft and WESTERN ACQUISITION
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microsoft and WESTERN is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and WESTERN ACQUISITION VENTURES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WESTERN ACQUISITION 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 WESTERN ACQUISITION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WESTERN ACQUISITION has no effect on the direction of Microsoft i.e., Microsoft and WESTERN ACQUISITION go up and down completely randomly.
Pair Corralation between Microsoft and WESTERN ACQUISITION
Given the investment horizon of 90 days Microsoft is expected to generate 550.93 times less return on investment than WESTERN ACQUISITION. But when comparing it to its historical volatility, Microsoft is 37.14 times less risky than WESTERN ACQUISITION. It trades about 0.02 of its potential returns per unit of risk. WESTERN ACQUISITION VENTURES is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 2.01 in WESTERN ACQUISITION VENTURES on September 2, 2024 and sell it today you would earn a total of 0.67 from holding WESTERN ACQUISITION VENTURES or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 3.17% |
| Values | Daily Returns |
Microsoft vs. WESTERN ACQUISITION VENTURES
Performance |
| Timeline |
| Microsoft |
| WESTERN ACQUISITION |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Microsoft and WESTERN ACQUISITION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and WESTERN ACQUISITION
The main advantage of trading using opposite Microsoft and WESTERN ACQUISITION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, WESTERN ACQUISITION 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 WESTERN ACQUISITION will offset losses from the drop in WESTERN ACQUISITION'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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Stocks Directory Find actively traded stocks across global markets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |