Correlation Between Microsoft and Voya Gnma
Can any of the company-specific risk be diversified away by investing in both Microsoft and Voya Gnma 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 Voya Gnma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Voya Gnma Income, you can compare the effects of market volatilities on Microsoft and Voya Gnma 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 Voya Gnma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Voya Gnma.
Diversification Opportunities for Microsoft and Voya Gnma
Good diversification
The 3 months correlation between Microsoft and Voya is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Voya Gnma Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Gnma Income 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 Voya Gnma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Gnma Income has no effect on the direction of Microsoft i.e., Microsoft and Voya Gnma go up and down completely randomly.
Pair Corralation between Microsoft and Voya Gnma
Given the investment horizon of 90 days Microsoft is expected to generate 4.67 times more return on investment than Voya Gnma. However, Microsoft is 4.67 times more volatile than Voya Gnma Income. It trades about 0.19 of its potential returns per unit of risk. Voya Gnma Income is currently generating about -0.32 per unit of risk. If you would invest 41,879 in Microsoft on September 26, 2024 and sell it today you would earn a total of 2,054 from holding Microsoft or generate 4.9% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Microsoft vs. Voya Gnma Income
Performance |
Timeline |
Microsoft |
Voya Gnma Income |
Microsoft and Voya Gnma Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Microsoft and Voya Gnma
The main advantage of trading using opposite Microsoft and Voya Gnma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Voya Gnma 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 Voya Gnma will offset losses from the drop in Voya Gnma's long position.Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
Voya Gnma vs. Touchstone Large Cap | Voya Gnma vs. Fidelity Series 1000 | Voya Gnma vs. American Mutual Fund | Voya Gnma vs. Guidemark Large Cap |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |