Correlation Between MIRAMAR HOTEL and Microsoft

Can any of the company-specific risk be diversified away by investing in both MIRAMAR HOTEL 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 MIRAMAR HOTEL and Microsoft into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MIRAMAR HOTEL INV and Microsoft, you can compare the effects of market volatilities on MIRAMAR HOTEL 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 MIRAMAR HOTEL with a short position of Microsoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of MIRAMAR HOTEL and Microsoft.

Diversification Opportunities for MIRAMAR HOTEL and Microsoft

0.3

Correlation Coefficient

MIRAMAR HOTEL  Microsoft

Weak diversification

The 3 months correlation between MIRAMAR and Microsoft is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding MIRAMAR HOTEL INV and Microsoft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microsoft and MIRAMAR HOTEL 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 MIRAMAR HOTEL INV 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 MIRAMAR HOTEL i.e., MIRAMAR HOTEL and Microsoft go up and down completely randomly.

Pair Corralation between MIRAMAR HOTEL and Microsoft

Assuming the 90 days trading horizon MIRAMAR HOTEL INV is expected to generate 1.86 times more return on investment than Microsoft. However, MIRAMAR HOTEL is 1.86 times more volatile than Microsoft. It trades about 0.07 of its potential returns per unit of risk. Microsoft is currently generating about 0.1 per unit of risk. If you would invest  55.00  in MIRAMAR HOTEL INV on October 4, 2024 and sell it today you would earn a total of  58.00  from holding MIRAMAR HOTEL INV or generate 105.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

MIRAMAR HOTEL INV  vs.  Microsoft

MIRAMAR HOTEL INV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MIRAMAR HOTEL INV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, MIRAMAR HOTEL is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Microsoft

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Microsoft may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with MIRAMAR HOTEL and Microsoft

The main advantage of trading using opposite MIRAMAR HOTEL and Microsoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MIRAMAR HOTEL 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.

The idea behind MIRAMAR HOTEL INV and Microsoft pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.