Correlation Between Microsoft and SaveLend Group
Can any of the company-specific risk be diversified away by investing in both Microsoft and SaveLend Group 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 SaveLend Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and SaveLend Group AB, you can compare the effects of market volatilities on Microsoft and SaveLend Group 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 SaveLend Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and SaveLend Group.
Diversification Opportunities for Microsoft and SaveLend Group
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Microsoft and SaveLend is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and SaveLend Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SaveLend Group AB 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 SaveLend Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SaveLend Group AB has no effect on the direction of Microsoft i.e., Microsoft and SaveLend Group go up and down completely randomly.
Pair Corralation between Microsoft and SaveLend Group
Given the investment horizon of 90 days Microsoft is expected to generate 0.35 times more return on investment than SaveLend Group. However, Microsoft is 2.87 times less risky than SaveLend Group. It trades about 0.02 of its potential returns per unit of risk. SaveLend Group AB is currently generating about -0.07 per unit of risk. If you would invest 41,123 in Microsoft on September 3, 2024 and sell it today you would earn a total of 1,223 from holding Microsoft or generate 2.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.65% |
| Values | Daily Returns |
Microsoft vs. SaveLend Group AB
Performance |
| Timeline |
| Microsoft |
| SaveLend Group AB |
Microsoft and SaveLend Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and SaveLend Group
The main advantage of trading using opposite Microsoft and SaveLend Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, SaveLend Group 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 SaveLend Group will offset losses from the drop in SaveLend Group's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| SaveLend Group vs. Smart Eye AB | SaveLend Group vs. Nepa AB | SaveLend Group vs. MAG Interactive AB | SaveLend Group vs. Hexatronic Group AB |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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