Correlation Between Microsoft and APACHE
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By analyzing existing cross correlation between Microsoft and APACHE P 6, you can compare the effects of market volatilities on Microsoft and APACHE 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 APACHE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and APACHE.
Diversification Opportunities for Microsoft and APACHE
Very good diversification
The 3 months correlation between Microsoft and APACHE is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and APACHE P 6 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APACHE P 6 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 APACHE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APACHE P 6 has no effect on the direction of Microsoft i.e., Microsoft and APACHE go up and down completely randomly.
Pair Corralation between Microsoft and APACHE
Given the investment horizon of 90 days Microsoft is expected to generate 1.16 times more return on investment than APACHE. However, Microsoft is 1.16 times more volatile than APACHE P 6. It trades about 0.07 of its potential returns per unit of risk. APACHE P 6 is currently generating about -0.08 per unit of risk. If you would invest 42,995 in Microsoft on September 18, 2024 and sell it today you would earn a total of 2,164 from holding Microsoft or generate 5.03% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 84.13% |
Values | Daily Returns |
Microsoft vs. APACHE P 6
Performance |
Timeline |
Microsoft |
APACHE P 6 |
Microsoft and APACHE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Microsoft and APACHE
The main advantage of trading using opposite Microsoft and APACHE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, APACHE 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 APACHE will offset losses from the drop in APACHE's long position.Microsoft vs. Global Blue Group | Microsoft vs. Aurora Mobile | Microsoft vs. Marqeta | Microsoft vs. Nextnav Acquisition Corp |
APACHE vs. Kulicke and Soffa | APACHE vs. PennantPark Floating Rate | APACHE vs. Mill City Ventures | APACHE vs. Encore Capital Group |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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