Correlation Between Microsoft and BLACK
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By analyzing existing cross correlation between Microsoft and BLACK HILLS P, you can compare the effects of market volatilities on Microsoft and BLACK 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 BLACK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and BLACK.
Diversification Opportunities for Microsoft and BLACK
Very good diversification
The 3 months correlation between Microsoft and BLACK is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and BLACK HILLS P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BLACK HILLS P 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 BLACK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BLACK HILLS P has no effect on the direction of Microsoft i.e., Microsoft and BLACK go up and down completely randomly.
Pair Corralation between Microsoft and BLACK
Given the investment horizon of 90 days Microsoft is expected to generate 2.22 times more return on investment than BLACK. However, Microsoft is 2.22 times more volatile than BLACK HILLS P. It trades about 0.05 of its potential returns per unit of risk. BLACK HILLS P is currently generating about -0.18 per unit of risk. If you would invest 42,375 in Microsoft on September 23, 2024 and sell it today you would earn a total of 1,285 from holding Microsoft or generate 3.03% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 81.4% |
Values | Daily Returns |
Microsoft vs. BLACK HILLS P
Performance |
Timeline |
Microsoft |
BLACK HILLS P |
Microsoft and BLACK Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Microsoft and BLACK
The main advantage of trading using opposite Microsoft and BLACK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, BLACK 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 BLACK will offset losses from the drop in BLACK's long position.Microsoft vs. BlackBerry | Microsoft vs. Global Blue Group | Microsoft vs. Aurora Mobile | Microsoft vs. Marqeta |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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