Correlation Between Microsoft and Strer SE
Can any of the company-specific risk be diversified away by investing in both Microsoft and Strer SE 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 Strer SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Strer SE Co, you can compare the effects of market volatilities on Microsoft and Strer SE 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 Strer SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Strer SE.
Diversification Opportunities for Microsoft and Strer SE
Very good diversification
The 3 months correlation between Microsoft and Strer is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Strer SE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strer SE 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 Strer SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strer SE has no effect on the direction of Microsoft i.e., Microsoft and Strer SE go up and down completely randomly.
Pair Corralation between Microsoft and Strer SE
Given the investment horizon of 90 days Microsoft is expected to generate 0.84 times more return on investment than Strer SE. However, Microsoft is 1.19 times less risky than Strer SE. It trades about 0.19 of its potential returns per unit of risk. Strer SE Co is currently generating about -0.02 per unit of risk. If you would invest 41,879 in Microsoft on September 25, 2024 and sell it today you would earn a total of 2,054 from holding Microsoft or generate 4.9% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.45% |
Values | Daily Returns |
Microsoft vs. Strer SE Co
Performance |
Timeline |
Microsoft |
Strer SE |
Microsoft and Strer SE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Microsoft and Strer SE
The main advantage of trading using opposite Microsoft and Strer SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Strer SE 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 Strer SE will offset losses from the drop in Strer SE's long position.Microsoft vs. BlackBerry | Microsoft vs. Global Blue Group | Microsoft vs. Aurora Mobile | Microsoft vs. Marqeta |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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