Correlation Between Microsoft and Ricky Putra

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

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

Diversification Opportunities for Microsoft and Ricky Putra

0.47

Correlation Coefficient

Microsoft  Ricky Putra

Very weak diversification

The 3 months correlation between Microsoft and Ricky is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Ricky Putra Globalindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ricky Putra Globalindo 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 Ricky Putra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ricky Putra Globalindo has no effect on the direction of Microsoft i.e., Microsoft and Ricky Putra go up and down completely randomly.

Pair Corralation between Microsoft and Ricky Putra

Given the investment horizon of 90 days Microsoft is expected to generate 0.45 times more return on investment than Ricky Putra. However, Microsoft is 2.21 times less risky than Ricky Putra. It trades about -0.11 of its potential returns per unit of risk. Ricky Putra Globalindo is currently generating about -0.13 per unit of risk. If you would invest  42,398  in Microsoft on December 30, 2024 and sell it today you would lose (4,518) from holding Microsoft or give up 10.66% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.77%
Values	Daily Returns

Microsoft  vs.  Ricky Putra Globalindo

Microsoft

Risk-Adjusted Performance

Very Weak

Over the last 90 days Microsoft has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Ricky Putra Globalindo

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ricky Putra Globalindo has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Microsoft and Ricky Putra

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

The idea behind Microsoft and Ricky Putra Globalindo 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.