Correlation Between Microsoft and Eventide Multi
Can any of the company-specific risk be diversified away by investing in both Microsoft and Eventide Multi 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 Eventide Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Eventide Multi Asset Income, you can compare the effects of market volatilities on Microsoft and Eventide Multi 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 Eventide Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Eventide Multi.
Diversification Opportunities for Microsoft and Eventide Multi
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Eventide is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Eventide Multi Asset Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eventide Multi Asset 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 Eventide Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eventide Multi Asset has no effect on the direction of Microsoft i.e., Microsoft and Eventide Multi go up and down completely randomly.
Pair Corralation between Microsoft and Eventide Multi
Given the investment horizon of 90 days Microsoft is expected to generate 2.55 times more return on investment than Eventide Multi. However, Microsoft is 2.55 times more volatile than Eventide Multi Asset Income. It trades about 0.01 of its potential returns per unit of risk. Eventide Multi Asset Income is currently generating about -0.09 per unit of risk. If you would invest 42,944 in Microsoft on September 30, 2024 and sell it today you would earn a total of 109.00 from holding Microsoft or generate 0.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Microsoft vs. Eventide Multi Asset Income
Performance |
Timeline |
Microsoft |
Eventide Multi Asset |
Microsoft and Eventide Multi Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Microsoft and Eventide Multi
The main advantage of trading using opposite Microsoft and Eventide Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Eventide Multi 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 Eventide Multi will offset losses from the drop in Eventide Multi's long position.Microsoft vs. Global Blue Group | ||
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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