Correlation Between Microsoft and Wuhan General
Can any of the company-specific risk be diversified away by investing in both Microsoft and Wuhan General 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 Wuhan General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Wuhan General Gr, you can compare the effects of market volatilities on Microsoft and Wuhan General 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 Wuhan General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Wuhan General.
Diversification Opportunities for Microsoft and Wuhan General
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Wuhan is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Wuhan General Gr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuhan General Gr 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 Wuhan General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuhan General Gr has no effect on the direction of Microsoft i.e., Microsoft and Wuhan General go up and down completely randomly.
Pair Corralation between Microsoft and Wuhan General
If you would invest 0.04 in Wuhan General Gr on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Wuhan General Gr or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Microsoft vs. Wuhan General Gr
Performance |
| Timeline |
| Microsoft |
| Wuhan General Gr |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Microsoft and Wuhan General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Wuhan General
The main advantage of trading using opposite Microsoft and Wuhan General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Wuhan General 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 Wuhan General will offset losses from the drop in Wuhan General's long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Paysafe |
| Wuhan General vs. Biome Grow | Wuhan General vs. Halo Collective | Wuhan General vs. Cannara Biotech | Wuhan General vs. Avicanna |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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