Correlation Between Microsoft and Asa International

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

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

Diversification Opportunities for Microsoft and Asa International

0.0

Correlation Coefficient

Microsoft  Asa International

Pay attention - limited upside

The 3 months correlation between Microsoft and Asa is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Asa International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asa International 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 Asa International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asa International has no effect on the direction of Microsoft i.e., Microsoft and Asa International go up and down completely randomly.

Pair Corralation between Microsoft and Asa International

If you would invest  43,045  in Microsoft on September 26, 2024 and sell it today you would earn a total of  888.00  from holding Microsoft or generate 2.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Microsoft  vs.  Asa International

Microsoft

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 2 (%) 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.

Asa International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asa International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Asa International is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Microsoft and Asa International

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

The idea behind Microsoft and Asa International 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.