Correlation Between Microsoft and SENKO GROUP

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

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

Diversification Opportunities for Microsoft and SENKO GROUP

0.36

Correlation Coefficient

Microsoft  SENKO GROUP

Weak diversification

The 3 months correlation between Microsoft and SENKO is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and SENKO GROUP HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SENKO GROUP HOLDINGS 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 SENKO GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SENKO GROUP HOLDINGS has no effect on the direction of Microsoft i.e., Microsoft and SENKO GROUP go up and down completely randomly.

Pair Corralation between Microsoft and SENKO GROUP

Given the investment horizon of 90 days Microsoft is expected to generate 1.29 times less return on investment than SENKO GROUP. But when comparing it to its historical volatility, Microsoft is 1.1 times less risky than SENKO GROUP. It trades about 0.07 of its potential returns per unit of risk. SENKO GROUP HOLDINGS is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  640.00  in SENKO GROUP HOLDINGS on September 23, 2024 and sell it today you would earn a total of  280.00  from holding SENKO GROUP HOLDINGS or generate 43.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Microsoft  vs.  SENKO GROUP HOLDINGS

Microsoft

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 1 (%) 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 current stock price uproar, may contribute to short-horizon losses for the private investors.

SENKO GROUP HOLDINGS

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SENKO GROUP HOLDINGS are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SENKO GROUP reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Microsoft and SENKO GROUP

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

The idea behind Microsoft and SENKO GROUP HOLDINGS 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.