Correlation Between Microsoft and HAGA SA
Can any of the company-specific risk be diversified away by investing in both Microsoft and HAGA SA 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 HAGA SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and HAGA SA Indstria, you can compare the effects of market volatilities on Microsoft and HAGA SA 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 HAGA SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and HAGA SA.
Diversification Opportunities for Microsoft and HAGA SA
Good diversification
The 3 months correlation between Microsoft and HAGA is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and HAGA SA Indstria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HAGA SA Indstria 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 HAGA SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HAGA SA Indstria has no effect on the direction of Microsoft i.e., Microsoft and HAGA SA go up and down completely randomly.
Pair Corralation between Microsoft and HAGA SA
Assuming the 90 days trading horizon Microsoft is expected to under-perform the HAGA SA. But the stock apears to be less risky and, when comparing its historical volatility, Microsoft is 1.05 times less risky than HAGA SA. The stock trades about -0.33 of its potential returns per unit of risk. The HAGA SA Indstria is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 121.00 in HAGA SA Indstria on November 18, 2024 and sell it today you would lose (1.00) from holding HAGA SA Indstria or give up 0.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. HAGA SA Indstria
Performance |
| Timeline |
| Microsoft |
| HAGA SA Indstria |
Microsoft and HAGA SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and HAGA SA
The main advantage of trading using opposite Microsoft and HAGA SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, HAGA SA 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 HAGA SA will offset losses from the drop in HAGA SA's long position.| Microsoft vs. Discover Financial Services | Microsoft vs. Bread Financial Holdings | Microsoft vs. Verizon Communications | Microsoft vs. Citizens Financial Group, |
| HAGA SA vs. Recrusul SA | HAGA SA vs. Lupatech SA | HAGA SA vs. Viver Incorporadora e | HAGA SA vs. Triunfo Participaes e |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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