Correlation Between Winshear Gold and Microsoft Corp
Can any of the company-specific risk be diversified away by investing in both Winshear Gold and Microsoft Corp 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 Winshear Gold and Microsoft Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Winshear Gold Corp and Microsoft Corp CDR, you can compare the effects of market volatilities on Winshear Gold and Microsoft Corp 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 Winshear Gold with a short position of Microsoft Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Winshear Gold and Microsoft Corp.
Diversification Opportunities for Winshear Gold and Microsoft Corp
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Winshear and Microsoft is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Winshear Gold Corp and Microsoft Corp CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microsoft Corp CDR and Winshear Gold 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 Winshear Gold Corp are associated (or correlated) with Microsoft Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microsoft Corp CDR has no effect on the direction of Winshear Gold i.e., Winshear Gold and Microsoft Corp go up and down completely randomly.
Pair Corralation between Winshear Gold and Microsoft Corp
Assuming the 90 days trading horizon Winshear Gold Corp is expected to generate 5.87 times more return on investment than Microsoft Corp. However, Winshear Gold is 5.87 times more volatile than Microsoft Corp CDR. It trades about 0.05 of its potential returns per unit of risk. Microsoft Corp CDR is currently generating about 0.02 per unit of risk. If you would invest 14.00 in Winshear Gold Corp on September 3, 2024 and sell it today you would earn a total of 3.00 from holding Winshear Gold Corp or generate 21.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Winshear Gold Corp vs. Microsoft Corp CDR
Performance |
| Timeline |
| Winshear Gold Corp |
| Microsoft Corp CDR |
Winshear Gold and Microsoft Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Winshear Gold and Microsoft Corp
The main advantage of trading using opposite Winshear Gold and Microsoft Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Winshear Gold position performs unexpectedly, Microsoft Corp 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 Corp will offset losses from the drop in Microsoft Corp's long position.| Winshear Gold vs. HOME DEPOT CDR | Winshear Gold vs. Dream Office Real | Winshear Gold vs. Precision Drilling | Winshear Gold vs. Thunderbird Entertainment Group |
| Microsoft Corp vs. Enghouse Systems | Microsoft Corp vs. Pulse Seismic | Microsoft Corp vs. Harvest Global REIT | Microsoft Corp vs. International Zeolite 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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