Correlation Between MicroStrategy Incorporated and KBS Real
Can any of the company-specific risk be diversified away by investing in both MicroStrategy Incorporated and KBS Real 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 MicroStrategy Incorporated and KBS Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MicroStrategy Incorporated and KBS Real Estate, you can compare the effects of market volatilities on MicroStrategy Incorporated and KBS Real 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 MicroStrategy Incorporated with a short position of KBS Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of MicroStrategy Incorporated and KBS Real.
Diversification Opportunities for MicroStrategy Incorporated and KBS Real
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MicroStrategy and KBS is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding MicroStrategy Incorporated and KBS Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBS Real Estate and MicroStrategy Incorporated 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 MicroStrategy Incorporated are associated (or correlated) with KBS Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KBS Real Estate has no effect on the direction of MicroStrategy Incorporated i.e., MicroStrategy Incorporated and KBS Real go up and down completely randomly.
Pair Corralation between MicroStrategy Incorporated and KBS Real
Given the investment horizon of 90 days MicroStrategy Incorporated is expected to generate 1.24 times more return on investment than KBS Real. However, MicroStrategy Incorporated is 1.24 times more volatile than KBS Real Estate. It trades about 0.13 of its potential returns per unit of risk. KBS Real Estate is currently generating about -0.08 per unit of risk. If you would invest 4,408 in MicroStrategy Incorporated on September 12, 2024 and sell it today you would earn a total of 33,324 from holding MicroStrategy Incorporated or generate 755.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MicroStrategy Incorporated vs. KBS Real Estate
Performance |
| Timeline |
| MicroStrategy Incorporated |
| KBS Real Estate |
MicroStrategy Incorporated and KBS Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MicroStrategy Incorporated and KBS Real
The main advantage of trading using opposite MicroStrategy Incorporated and KBS Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MicroStrategy Incorporated position performs unexpectedly, KBS Real 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 KBS Real will offset losses from the drop in KBS Real's long position.| MicroStrategy Incorporated vs. Autodesk | MicroStrategy Incorporated vs. Intuit Inc | MicroStrategy Incorporated vs. Zoom Video Communications | MicroStrategy Incorporated vs. Snowflake |
| KBS Real vs. Highwoods Properties | KBS Real vs. Piedmont Office Realty | KBS Real vs. Douglas Emmett | KBS Real vs. Kilroy Realty Corp |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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