Correlation Between Karsten SA and Microsoft
Can any of the company-specific risk be diversified away by investing in both Karsten SA and Microsoft 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 Karsten SA and Microsoft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Karsten SA and Microsoft, you can compare the effects of market volatilities on Karsten SA and Microsoft 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 Karsten SA with a short position of Microsoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karsten SA and Microsoft.
Diversification Opportunities for Karsten SA and Microsoft
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Karsten and Microsoft is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Karsten SA and Microsoft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microsoft and Karsten SA 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 Karsten SA are associated (or correlated) with Microsoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microsoft has no effect on the direction of Karsten SA i.e., Karsten SA and Microsoft go up and down completely randomly.
Pair Corralation between Karsten SA and Microsoft
If you would invest 10,106 in Microsoft on September 25, 2024 and sell it today you would earn a total of 1,065 from holding Microsoft or generate 10.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 95.45% |
Values | Daily Returns |
Karsten SA vs. Microsoft
Performance |
Timeline |
Karsten SA |
Microsoft |
Karsten SA and Microsoft Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Karsten SA and Microsoft
The main advantage of trading using opposite Karsten SA and Microsoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karsten SA position performs unexpectedly, Microsoft 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 Microsoft will offset losses from the drop in Microsoft's long position.Karsten SA vs. Pettenati SA Industria | Karsten SA vs. Companhia de Tecidos | Karsten SA vs. Companhia de Tecidos | Karsten SA vs. Karsten SA |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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