Correlation Between Microsoft and PLAYSTUDIOS

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

By analyzing existing cross correlation between Microsoft and PLAYSTUDIOS A DL 0001, you can compare the effects of market volatilities on Microsoft and PLAYSTUDIOS 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 PLAYSTUDIOS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and PLAYSTUDIOS.

Diversification Opportunities for Microsoft and PLAYSTUDIOS

0.88

Correlation Coefficient

Microsoft  PLAYSTUDIOS

Very poor diversification

The 3 months correlation between Microsoft and PLAYSTUDIOS is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and PLAYSTUDIOS A DL 0001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYSTUDIOS A DL 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 are associated (or correlated) with PLAYSTUDIOS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYSTUDIOS A DL has no effect on the direction of Microsoft i.e., Microsoft and PLAYSTUDIOS go up and down completely randomly.

Pair Corralation between Microsoft and PLAYSTUDIOS

Assuming the 90 days trading horizon Microsoft is expected to generate 0.48 times more return on investment than PLAYSTUDIOS. However, Microsoft is 2.07 times less risky than PLAYSTUDIOS. It trades about -0.1 of its potential returns per unit of risk. PLAYSTUDIOS A DL 0001 is currently generating about -0.2 per unit of risk. If you would invest  40,868  in Microsoft on December 26, 2024 and sell it today you would lose (4,378) from holding Microsoft or give up 10.71% of portfolio value over 90 days.

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

Microsoft  vs.  PLAYSTUDIOS A DL 0001

Microsoft

Risk-Adjusted Performance

Very Weak

Over the last 90 days Microsoft has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

PLAYSTUDIOS A DL

Risk-Adjusted Performance

Very Weak

Over the last 90 days PLAYSTUDIOS A DL 0001 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Microsoft and PLAYSTUDIOS

The main advantage of trading using opposite Microsoft and PLAYSTUDIOS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, PLAYSTUDIOS 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 PLAYSTUDIOS will offset losses from the drop in PLAYSTUDIOS's long position.

The idea behind Microsoft and PLAYSTUDIOS A DL 0001 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.