Correlation Between Microsoft and Cahayaputra Asa

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

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

Diversification Opportunities for Microsoft and Cahayaputra Asa

0.33

Correlation Coefficient

Microsoft  Cahayaputra Asa

Weak diversification

The 3 months correlation between Microsoft and Cahayaputra is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Cahayaputra Asa Keramik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cahayaputra Asa Keramik 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 Cahayaputra Asa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cahayaputra Asa Keramik has no effect on the direction of Microsoft i.e., Microsoft and Cahayaputra Asa go up and down completely randomly.

Pair Corralation between Microsoft and Cahayaputra Asa

Given the investment horizon of 90 days Microsoft is expected to generate 0.45 times more return on investment than Cahayaputra Asa. However, Microsoft is 2.23 times less risky than Cahayaputra Asa. It trades about 0.08 of its potential returns per unit of risk. Cahayaputra Asa Keramik is currently generating about -0.01 per unit of risk. If you would invest  25,277  in Microsoft on September 3, 2024 and sell it today you would earn a total of  17,069  from holding Microsoft or generate 67.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.56%
Values	Daily Returns

Microsoft  vs.  Cahayaputra Asa Keramik

Microsoft

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 3 (%) 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.

Cahayaputra Asa Keramik

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cahayaputra Asa Keramik are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Cahayaputra Asa is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Microsoft and Cahayaputra Asa

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

The idea behind Microsoft and Cahayaputra Asa Keramik 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.