Correlation Between Microsoft and GASBCM

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

By analyzing existing cross correlation between Microsoft and GASBCM 6129 23 FEB 38, you can compare the effects of market volatilities on Microsoft and GASBCM 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 GASBCM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and GASBCM.

Diversification Opportunities for Microsoft and GASBCM

-0.1

Correlation Coefficient

Microsoft  GASBCM

Good diversification

The 3 months correlation between Microsoft and GASBCM is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and GASBCM 6129 23 FEB 38 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GASBCM 6129 23 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 GASBCM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GASBCM 6129 23 has no effect on the direction of Microsoft i.e., Microsoft and GASBCM go up and down completely randomly.

Pair Corralation between Microsoft and GASBCM

Given the investment horizon of 90 days Microsoft is expected to under-perform the GASBCM. In addition to that, Microsoft is 3.9 times more volatile than GASBCM 6129 23 FEB 38. It trades about -0.27 of its total potential returns per unit of risk. GASBCM 6129 23 FEB 38 is currently generating about 0.71 per unit of volatility. If you would invest  10,158  in GASBCM 6129 23 FEB 38 on December 10, 2024 and sell it today you would earn a total of  53.00  from holding GASBCM 6129 23 FEB 38 or generate 0.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	10.0%
Values	Daily Returns

Microsoft  vs.  GASBCM 6129 23 FEB 38

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 abnormal performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

GASBCM 6129 23

Risk-Adjusted Performance

Very Weak

Over the last 90 days GASBCM 6129 23 FEB 38 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, GASBCM is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Microsoft and GASBCM

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

The idea behind Microsoft and GASBCM 6129 23 FEB 38 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.