Correlation Between Microsoft and Orgenesis

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

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

Diversification Opportunities for Microsoft and Orgenesis

-0.54

Correlation Coefficient

Microsoft  Orgenesis

Excellent diversification

The 3 months correlation between Microsoft and Orgenesis is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Orgenesis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orgenesis 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 Orgenesis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orgenesis has no effect on the direction of Microsoft i.e., Microsoft and Orgenesis go up and down completely randomly.

Pair Corralation between Microsoft and Orgenesis

Given the investment horizon of 90 days Microsoft is expected to generate 0.12 times more return on investment than Orgenesis. However, Microsoft is 8.18 times less risky than Orgenesis. It trades about -0.06 of its potential returns per unit of risk. Orgenesis is currently generating about -0.15 per unit of risk. If you would invest  46,447  in Microsoft on October 4, 2024 and sell it today you would lose (4,580) from holding Microsoft or give up 9.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	61.11%
Values	Daily Returns

Microsoft  vs.  Orgenesis

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 latest stock price uproar, may contribute to short-horizon losses for the private investors.

Orgenesis

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Orgenesis has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Microsoft and Orgenesis

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

The idea behind Microsoft and Orgenesis 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.