Correlation Between Microsoft and Lennar
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By analyzing existing cross correlation between Microsoft and Lennar 475 percent, you can compare the effects of market volatilities on Microsoft and Lennar 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 Lennar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Lennar.
Diversification Opportunities for Microsoft and Lennar
Very good diversification
The 3 months correlation between Microsoft and Lennar is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Lennar 475 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lennar 475 percent 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 Lennar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lennar 475 percent has no effect on the direction of Microsoft i.e., Microsoft and Lennar go up and down completely randomly.
Pair Corralation between Microsoft and Lennar
Given the investment horizon of 90 days Microsoft is expected to generate 3.22 times more return on investment than Lennar. However, Microsoft is 3.22 times more volatile than Lennar 475 percent. It trades about 0.02 of its potential returns per unit of risk. Lennar 475 percent is currently generating about -0.2 per unit of risk. If you would invest 42,831 in Microsoft on September 24, 2024 and sell it today you would earn a total of 652.00 from holding Microsoft or generate 1.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 95.38% |
Values | Daily Returns |
Microsoft vs. Lennar 475 percent
Performance |
Timeline |
Microsoft |
Lennar 475 percent |
Microsoft and Lennar Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Microsoft and Lennar
The main advantage of trading using opposite Microsoft and Lennar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Lennar 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 Lennar will offset losses from the drop in Lennar's long position.Microsoft vs. BlackBerry | Microsoft vs. Global Blue Group | Microsoft vs. Aurora Mobile | Microsoft vs. Marqeta |
Lennar vs. Emerson Electric | Lennar vs. Cincinnati Financial | Lennar vs. Direct Line Insurance | Lennar vs. Park Ohio Holdings |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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