Correlation Between Microsoft and Edgepoint Cdn

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Can any of the company-specific risk be diversified away by investing in both Microsoft and Edgepoint Cdn 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 Edgepoint Cdn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Edgepoint Cdn Growth, you can compare the effects of market volatilities on Microsoft and Edgepoint Cdn 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 Edgepoint Cdn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Edgepoint Cdn.

Diversification Opportunities for Microsoft and Edgepoint Cdn

MicrosoftEdgepointDiversified AwayMicrosoftEdgepointDiversified Away100%
-0.19
  Correlation Coefficient

Good diversification

The 3 months correlation between Microsoft and Edgepoint is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Edgepoint Cdn Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edgepoint Cdn Growth 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 Edgepoint Cdn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edgepoint Cdn Growth has no effect on the direction of Microsoft i.e., Microsoft and Edgepoint Cdn go up and down completely randomly.

Pair Corralation between Microsoft and Edgepoint Cdn

Given the investment horizon of 90 days Microsoft is expected to under-perform the Edgepoint Cdn. In addition to that, Microsoft is 3.47 times more volatile than Edgepoint Cdn Growth. It trades about -0.01 of its total potential returns per unit of risk. Edgepoint Cdn Growth is currently generating about 0.04 per unit of volatility. If you would invest  3,162  in Edgepoint Cdn Growth on November 21, 2024 and sell it today you would earn a total of  29.00  from holding Edgepoint Cdn Growth or generate 0.92% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy96.67%
ValuesDaily Returns

Microsoft  vs.  Edgepoint Cdn Growth

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -4-202468
JavaScript chart by amCharts 3.21.15MSFT 0P0000JO4R
       Timeline  
Microsoft 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Microsoft has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Microsoft is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb410420430440450
Edgepoint Cdn Growth 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Edgepoint Cdn Growth are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively steady forward-looking indicators, Edgepoint Cdn is not utilizing all of its potentials. The latest stock price chaos, may contribute to medium-term losses for the stakeholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb30.630.83131.231.431.631.832

Microsoft and Edgepoint Cdn Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.38-1.8-1.22-0.64-0.05940.481.061.642.222.8 0.51.01.52.0
JavaScript chart by amCharts 3.21.15MSFT 0P0000JO4R
       Returns  

Pair Trading with Microsoft and Edgepoint Cdn

The main advantage of trading using opposite Microsoft and Edgepoint Cdn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Edgepoint Cdn 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 Edgepoint Cdn will offset losses from the drop in Edgepoint Cdn's long position.
The idea behind Microsoft and Edgepoint Cdn Growth 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.

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