Correlation Between Microsoft and CareClix Holdings

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

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

Diversification Opportunities for Microsoft and CareClix Holdings

0.0

Correlation Coefficient

Microsoft  CareClix Holdings

Pay attention - limited upside

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

Pair Corralation between Microsoft and CareClix Holdings

If you would invest  41,879  in Microsoft on September 24, 2024 and sell it today you would earn a total of  1,781  from holding Microsoft or generate 4.25% return on investment over 90 days.

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

Microsoft  vs.  CareClix Holdings

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 current stock price uproar, may contribute to short-horizon losses for the private investors.

CareClix Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CareClix Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong essential indicators, CareClix Holdings is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Microsoft and CareClix Holdings

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

The idea behind Microsoft and CareClix 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.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.