Correlation Between Microsoft and Ossiam Lux

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

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

Diversification Opportunities for Microsoft and Ossiam Lux

0.68

Correlation Coefficient

Microsoft  Ossiam Lux

Poor diversification

The 3 months correlation between Microsoft and Ossiam is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Ossiam Lux Barclays in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ossiam Lux Barclays 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 Ossiam Lux. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ossiam Lux Barclays has no effect on the direction of Microsoft i.e., Microsoft and Ossiam Lux go up and down completely randomly.

Pair Corralation between Microsoft and Ossiam Lux

Given the investment horizon of 90 days Microsoft is expected to under-perform the Ossiam Lux. In addition to that, Microsoft is 1.36 times more volatile than Ossiam Lux Barclays. It trades about -0.03 of its total potential returns per unit of risk. Ossiam Lux Barclays is currently generating about 0.08 per unit of volatility. If you would invest  11,662  in Ossiam Lux Barclays on September 29, 2024 and sell it today you would earn a total of  1,162  from holding Ossiam Lux Barclays or generate 9.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Microsoft  vs.  Ossiam Lux Barclays

Microsoft

Risk-Adjusted Performance

0 of 100

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 current stock price uproar, may contribute to short-horizon losses for the private investors.

Ossiam Lux Barclays

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ossiam Lux Barclays are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Ossiam Lux is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Microsoft and Ossiam Lux

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

The idea behind Microsoft and Ossiam Lux Barclays 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.