Correlation Between MICROSOFT and Dow Jones
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By analyzing existing cross correlation between MICROSOFT PORATION and Dow Jones Industrial, you can compare the effects of market volatilities on MICROSOFT and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of MICROSOFT and Dow Jones.
Diversification Opportunities for MICROSOFT and Dow Jones
Very good diversification
The 3 months correlation between MICROSOFT and Dow is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding MICROSOFT PORATION and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 PORATION are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of MICROSOFT i.e., MICROSOFT and Dow Jones go up and down completely randomly.
Pair Corralation between MICROSOFT and Dow Jones
Assuming the 90 days trading horizon MICROSOFT PORATION is expected to generate 1.95 times more return on investment than Dow Jones. However, MICROSOFT is 1.95 times more volatile than Dow Jones Industrial. It trades about 0.2 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.0 per unit of risk. If you would invest 6,063 in MICROSOFT PORATION on September 13, 2024 and sell it today you would earn a total of 267.00 from holding MICROSOFT PORATION or generate 4.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
MICROSOFT PORATION vs. Dow Jones Industrial
Performance |
| Timeline |
MICROSOFT and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
MICROSOFT PORATION
Pair trading matchups for MICROSOFT
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with MICROSOFT and Dow Jones
The main advantage of trading using opposite MICROSOFT and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MICROSOFT position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| MICROSOFT vs. LGI Homes | MICROSOFT vs. Mid Atlantic Home Health | MICROSOFT vs. Hooker Furniture | MICROSOFT vs. Cardinal Health |
| Dow Jones vs. ChampionX | Dow Jones vs. Highway Holdings Limited | Dow Jones vs. Westinghouse Air Brake | Dow Jones vs. Cementos Pacasmayo SAA |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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