Correlation Between Microsoft and Emaar Misr
Can any of the company-specific risk be diversified away by investing in both Microsoft and Emaar Misr 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 Emaar Misr into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Emaar Misr for, you can compare the effects of market volatilities on Microsoft and Emaar Misr 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 Emaar Misr. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Emaar Misr.
Diversification Opportunities for Microsoft and Emaar Misr
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microsoft and Emaar is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Emaar Misr for in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emaar Misr for 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 Emaar Misr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emaar Misr for has no effect on the direction of Microsoft i.e., Microsoft and Emaar Misr go up and down completely randomly.
Pair Corralation between Microsoft and Emaar Misr
Given the investment horizon of 90 days Microsoft is expected to generate 0.52 times more return on investment than Emaar Misr. However, Microsoft is 1.92 times less risky than Emaar Misr. It trades about 0.03 of its potential returns per unit of risk. Emaar Misr for is currently generating about -0.05 per unit of risk. If you would invest 43,125 in Microsoft on September 25, 2024 and sell it today you would earn a total of 808.00 from holding Microsoft or generate 1.87% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 81.25% |
Values | Daily Returns |
Microsoft vs. Emaar Misr for
Performance |
Timeline |
Microsoft |
Emaar Misr for |
Microsoft and Emaar Misr Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Microsoft and Emaar Misr
The main advantage of trading using opposite Microsoft and Emaar Misr positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Emaar Misr 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 Emaar Misr will offset losses from the drop in Emaar Misr's long position.Microsoft vs. BlackBerry | Microsoft vs. Global Blue Group | Microsoft vs. Aurora Mobile | Microsoft vs. Marqeta |
Emaar Misr vs. Memphis Pharmaceuticals | Emaar Misr vs. Paint Chemicals Industries | Emaar Misr vs. Egyptians For Investment | Emaar Misr vs. Global Telecom Holding |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
CEOs Directory Screen CEOs from public companies around the world | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume |