Correlation Between TRADEDOUBLER and Microsoft
Can any of the company-specific risk be diversified away by investing in both TRADEDOUBLER and Microsoft 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 TRADEDOUBLER and Microsoft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRADEDOUBLER AB SK and Microsoft, you can compare the effects of market volatilities on TRADEDOUBLER and Microsoft 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 TRADEDOUBLER with a short position of Microsoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRADEDOUBLER and Microsoft.
Diversification Opportunities for TRADEDOUBLER and Microsoft
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between TRADEDOUBLER and Microsoft is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding TRADEDOUBLER AB SK and Microsoft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microsoft and TRADEDOUBLER 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 TRADEDOUBLER AB SK are associated (or correlated) with Microsoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microsoft has no effect on the direction of TRADEDOUBLER i.e., TRADEDOUBLER and Microsoft go up and down completely randomly.
Pair Corralation between TRADEDOUBLER and Microsoft
Assuming the 90 days horizon TRADEDOUBLER is expected to generate 5.49 times less return on investment than Microsoft. In addition to that, TRADEDOUBLER is 2.5 times more volatile than Microsoft. It trades about 0.01 of its total potential returns per unit of risk. Microsoft is currently generating about 0.09 per unit of volatility. If you would invest 22,059 in Microsoft on October 12, 2024 and sell it today you would earn a total of 18,751 from holding Microsoft or generate 85.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TRADEDOUBLER AB SK vs. Microsoft
Performance |
| Timeline |
| TRADEDOUBLER AB SK |
| Microsoft |
TRADEDOUBLER and Microsoft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRADEDOUBLER and Microsoft
The main advantage of trading using opposite TRADEDOUBLER and Microsoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRADEDOUBLER position performs unexpectedly, Microsoft 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 Microsoft will offset losses from the drop in Microsoft's long position.| TRADEDOUBLER vs. COVIVIO HOTELS INH | TRADEDOUBLER vs. THORNEY TECHS LTD | TRADEDOUBLER vs. Digilife Technologies Limited | TRADEDOUBLER vs. Minerals Technologies |
| Microsoft vs. H2O Retailing | Microsoft vs. TRADEDOUBLER AB SK | Microsoft vs. Tradegate AG Wertpapierhandelsbank | Microsoft vs. Tradeweb Markets |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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