Correlation Between Microsoft and Bleuacacia

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

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

Diversification Opportunities for Microsoft and Bleuacacia

-0.38

Correlation Coefficient

Microsoft  Bleuacacia

Very good diversification

The 3 months correlation between Microsoft and Bleuacacia is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Bleuacacia Ltd Rights in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bleuacacia Rights 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 Bleuacacia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bleuacacia Rights has no effect on the direction of Microsoft i.e., Microsoft and Bleuacacia go up and down completely randomly.

Pair Corralation between Microsoft and Bleuacacia

If you would invest  0.85  in Bleuacacia Ltd Rights on October 11, 2024 and sell it today you would earn a total of  0.00  from holding Bleuacacia Ltd Rights or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

Microsoft  vs.  Bleuacacia Ltd Rights

Microsoft

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

Bleuacacia Rights

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Bleuacacia Ltd Rights has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively abnormal basic indicators, Bleuacacia reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Microsoft and Bleuacacia

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

The idea behind Microsoft and Bleuacacia Ltd Rights 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.