Correlation Between Microsoft and Komercn Banka

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

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

Diversification Opportunities for Microsoft and Komercn Banka

0.62

Correlation Coefficient

Microsoft  Komercn Banka

Poor diversification

The 3 months correlation between Microsoft and Komercn is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Komercn banka as in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Komercn banka as 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 Komercn Banka. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Komercn banka as has no effect on the direction of Microsoft i.e., Microsoft and Komercn Banka go up and down completely randomly.

Pair Corralation between Microsoft and Komercn Banka

Given the investment horizon of 90 days Microsoft is expected to generate 1.37 times less return on investment than Komercn Banka. In addition to that, Microsoft is 1.14 times more volatile than Komercn banka as. It trades about 0.05 of its total potential returns per unit of risk. Komercn banka as is currently generating about 0.09 per unit of volatility. If you would invest  3,192  in Komercn banka as on September 23, 2024 and sell it today you would earn a total of  146.00  from holding Komercn banka as or generate 4.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	97.73%
Values	Daily Returns

Microsoft  vs.  Komercn banka as

Microsoft

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 1 (%) 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 current stock price uproar, may contribute to short-horizon losses for the private investors.

Komercn banka as

Risk-Adjusted Performance

8 of 100

OK

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

Pair Trading with Microsoft and Komercn Banka

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

The idea behind Microsoft and Komercn banka as 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.