Correlation Between Microsoft and Greek Organization

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

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

Diversification Opportunities for Microsoft and Greek Organization

-0.59

Correlation Coefficient

Microsoft  Greek Organization

Excellent diversification

The 3 months correlation between Microsoft and Greek is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Greek Organization of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greek Organization 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 Greek Organization. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greek Organization has no effect on the direction of Microsoft i.e., Microsoft and Greek Organization go up and down completely randomly.

Pair Corralation between Microsoft and Greek Organization

Given the investment horizon of 90 days Microsoft is expected to under-perform the Greek Organization. But the stock apears to be less risky and, when comparing its historical volatility, Microsoft is 1.02 times less risky than Greek Organization. The stock trades about -0.08 of its potential returns per unit of risk. The Greek Organization of is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,550  in Greek Organization of on December 3, 2024 and sell it today you would earn a total of  137.00  from holding Greek Organization of or generate 8.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Microsoft  vs.  Greek Organization of

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 latest abnormal performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Greek Organization

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Greek Organization of are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Greek Organization may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Microsoft and Greek Organization

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

The idea behind Microsoft and Greek Organization of 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.