Correlation Between Microsoft and GraniteShares Platinum

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

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

Diversification Opportunities for Microsoft and GraniteShares Platinum

-0.43

Correlation Coefficient

Microsoft  GraniteShares Platinum

Very good diversification

The 3 months correlation between Microsoft and GraniteShares is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and GraniteShares Platinum Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares Platinum 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 GraniteShares Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares Platinum has no effect on the direction of Microsoft i.e., Microsoft and GraniteShares Platinum go up and down completely randomly.

Pair Corralation between Microsoft and GraniteShares Platinum

Given the investment horizon of 90 days Microsoft is expected to generate 1.01 times more return on investment than GraniteShares Platinum. However, Microsoft is 1.01 times more volatile than GraniteShares Platinum Trust. It trades about 0.02 of its potential returns per unit of risk. GraniteShares Platinum Trust is currently generating about -0.03 per unit of risk. If you would invest  41,830  in Microsoft on October 12, 2024 and sell it today you would earn a total of  626.00  from holding Microsoft or generate 1.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Microsoft  vs.  GraniteShares Platinum Trust

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.

GraniteShares Platinum

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GraniteShares Platinum Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, GraniteShares Platinum is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Microsoft and GraniteShares Platinum

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

The idea behind Microsoft and GraniteShares Platinum Trust 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..