Correlation Between Microsoft and HANetf II

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

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

Diversification Opportunities for Microsoft and HANetf II

0.56

Correlation Coefficient

Microsoft  HANetf II

Very weak diversification

The 3 months correlation between Microsoft and HANetf is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and HANetf II ICAV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANetf II ICAV 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 HANetf II. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HANetf II ICAV has no effect on the direction of Microsoft i.e., Microsoft and HANetf II go up and down completely randomly.

Pair Corralation between Microsoft and HANetf II

Given the investment horizon of 90 days Microsoft is expected to generate 2.31 times less return on investment than HANetf II. In addition to that, Microsoft is 2.58 times more volatile than HANetf II ICAV. It trades about 0.02 of its total potential returns per unit of risk. HANetf II ICAV is currently generating about 0.13 per unit of volatility. If you would invest  719.00  in HANetf II ICAV on October 23, 2024 and sell it today you would earn a total of  30.00  from holding HANetf II ICAV or generate 4.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Microsoft  vs.  HANetf II ICAV

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.

HANetf II ICAV

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HANetf II ICAV are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, HANetf II is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Microsoft and HANetf II

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

The idea behind Microsoft and HANetf II ICAV 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.