Correlation Between Microsoft and Accustem Sciences

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

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

Diversification Opportunities for Microsoft and Accustem Sciences

-0.12

Correlation Coefficient

Microsoft  Accustem Sciences

Good diversification

The 3 months correlation between Microsoft and Accustem is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Accustem Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accustem Sciences 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 Accustem Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accustem Sciences has no effect on the direction of Microsoft i.e., Microsoft and Accustem Sciences go up and down completely randomly.

Pair Corralation between Microsoft and Accustem Sciences

Given the investment horizon of 90 days Microsoft is expected to under-perform the Accustem Sciences. But the stock apears to be less risky and, when comparing its historical volatility, Microsoft is 11.04 times less risky than Accustem Sciences. The stock trades about -0.06 of its potential returns per unit of risk. The Accustem Sciences is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  36.00  in Accustem Sciences on November 29, 2024 and sell it today you would lose (11.00) from holding Accustem Sciences or give up 30.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.16%
Values	Daily Returns

Microsoft  vs.  Accustem Sciences

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 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.

Accustem Sciences

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Accustem Sciences are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Accustem Sciences unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Microsoft and Accustem Sciences

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

The idea behind Microsoft and Accustem Sciences 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.