Correlation Between Microsoft and Xvivo Perfusion

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

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

Diversification Opportunities for Microsoft and Xvivo Perfusion

0.19

Correlation Coefficient

Microsoft  Xvivo Perfusion

Average diversification

The 3 months correlation between Microsoft and Xvivo is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Xvivo Perfusion AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xvivo Perfusion AB 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 Xvivo Perfusion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xvivo Perfusion AB has no effect on the direction of Microsoft i.e., Microsoft and Xvivo Perfusion go up and down completely randomly.

Pair Corralation between Microsoft and Xvivo Perfusion

Given the investment horizon of 90 days Microsoft is expected to generate 0.61 times more return on investment than Xvivo Perfusion. However, Microsoft is 1.63 times less risky than Xvivo Perfusion. It trades about 0.05 of its potential returns per unit of risk. Xvivo Perfusion AB is currently generating about -0.05 per unit of risk. If you would invest  40,862  in Microsoft on September 2, 2024 and sell it today you would earn a total of  1,484  from holding Microsoft or generate 3.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.97%
Values	Daily Returns

Microsoft  vs.  Xvivo Perfusion AB

Microsoft

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Microsoft is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Xvivo Perfusion AB

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Microsoft and Xvivo Perfusion

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

The idea behind Microsoft and Xvivo Perfusion AB 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.