Correlation Between Microsoft and Mercan Kimya
Can any of the company-specific risk be diversified away by investing in both Microsoft and Mercan Kimya 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 Mercan Kimya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Mercan Kimya Sanayi, you can compare the effects of market volatilities on Microsoft and Mercan Kimya 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 Mercan Kimya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Mercan Kimya.
Diversification Opportunities for Microsoft and Mercan Kimya
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Microsoft and Mercan is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Mercan Kimya Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercan Kimya Sanayi 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 Mercan Kimya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercan Kimya Sanayi has no effect on the direction of Microsoft i.e., Microsoft and Mercan Kimya go up and down completely randomly.
Pair Corralation between Microsoft and Mercan Kimya
Given the investment horizon of 90 days Microsoft is expected to generate 0.75 times more return on investment than Mercan Kimya. However, Microsoft is 1.33 times less risky than Mercan Kimya. It trades about 0.18 of its potential returns per unit of risk. Mercan Kimya Sanayi is currently generating about -0.28 per unit of risk. If you would invest 41,700 in Microsoft on September 23, 2024 and sell it today you would earn a total of 1,960 from holding Microsoft or generate 4.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Microsoft vs. Mercan Kimya Sanayi
Performance |
Timeline |
Microsoft |
Mercan Kimya Sanayi |
Microsoft and Mercan Kimya Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Microsoft and Mercan Kimya
The main advantage of trading using opposite Microsoft and Mercan Kimya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Mercan Kimya 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 Mercan Kimya will offset losses from the drop in Mercan Kimya's long position.Microsoft vs. BlackBerry | Microsoft vs. Global Blue Group | Microsoft vs. Aurora Mobile | Microsoft vs. Marqeta |
Mercan Kimya vs. Akcansa Cimento Sanayi | Mercan Kimya vs. Trabzonspor Sportif Yatirim | Mercan Kimya vs. Bms Birlesik Metal | Mercan Kimya vs. E Data Teknoloji Pazarlama |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Commodity Directory Find actively traded commodities issued by global exchanges |