Correlation Between Microsoft and Blackrock Muniassets
Can any of the company-specific risk be diversified away by investing in both Microsoft and Blackrock Muniassets 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 Blackrock Muniassets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Blackrock Muniassets, you can compare the effects of market volatilities on Microsoft and Blackrock Muniassets 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 Blackrock Muniassets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Blackrock Muniassets.
Diversification Opportunities for Microsoft and Blackrock Muniassets
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Microsoft and Blackrock is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Blackrock Muniassets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniassets 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 Blackrock Muniassets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muniassets has no effect on the direction of Microsoft i.e., Microsoft and Blackrock Muniassets go up and down completely randomly.
Pair Corralation between Microsoft and Blackrock Muniassets
Given the investment horizon of 90 days Microsoft is expected to generate 3.18 times more return on investment than Blackrock Muniassets. However, Microsoft is 3.18 times more volatile than Blackrock Muniassets. It trades about 0.06 of its potential returns per unit of risk. Blackrock Muniassets is currently generating about 0.07 per unit of risk. If you would invest 36,854 in Microsoft on September 4, 2024 and sell it today you would earn a total of 6,244 from holding Microsoft or generate 16.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Blackrock Muniassets
Performance |
| Timeline |
| Microsoft |
| Blackrock Muniassets |
Microsoft and Blackrock Muniassets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Blackrock Muniassets
The main advantage of trading using opposite Microsoft and Blackrock Muniassets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Blackrock Muniassets 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 Blackrock Muniassets will offset losses from the drop in Blackrock Muniassets' long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Blackrock Muniassets vs. Morningstar Aggressive Growth | Blackrock Muniassets vs. Western Asset High | Blackrock Muniassets vs. Vanguard Star Fund | Blackrock Muniassets vs. Siit High Yield |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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