Correlation Between Microsoft and CARRIER
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By analyzing existing cross correlation between Microsoft and CARRIER GLOBAL P, you can compare the effects of market volatilities on Microsoft and CARRIER 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 CARRIER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and CARRIER.
Diversification Opportunities for Microsoft and CARRIER
Very good diversification
The 3 months correlation between Microsoft and CARRIER is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and CARRIER GLOBAL P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARRIER GLOBAL P 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 CARRIER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARRIER GLOBAL P has no effect on the direction of Microsoft i.e., Microsoft and CARRIER go up and down completely randomly.
Pair Corralation between Microsoft and CARRIER
Given the investment horizon of 90 days Microsoft is expected to generate 1.98 times more return on investment than CARRIER. However, Microsoft is 1.98 times more volatile than CARRIER GLOBAL P. It trades about 0.02 of its potential returns per unit of risk. CARRIER GLOBAL P is currently generating about -0.16 per unit of risk. If you would invest 43,264 in Microsoft on September 23, 2024 and sell it today you would earn a total of 396.00 from holding Microsoft or generate 0.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 96.92% |
Values | Daily Returns |
Microsoft vs. CARRIER GLOBAL P
Performance |
Timeline |
Microsoft |
CARRIER GLOBAL P |
Microsoft and CARRIER Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Microsoft and CARRIER
The main advantage of trading using opposite Microsoft and CARRIER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, CARRIER 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 CARRIER will offset losses from the drop in CARRIER's long position.Microsoft vs. BlackBerry | Microsoft vs. Global Blue Group | Microsoft vs. Aurora Mobile | Microsoft vs. Marqeta |
CARRIER vs. Olympic Steel | CARRIER vs. Tianjin Capital Environmental | CARRIER vs. Sanyo Special Steel | CARRIER vs. CECO Environmental Corp |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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