Correlation Between Microsoft and MARRIOTT
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By analyzing existing cross correlation between Microsoft and MARRIOTT INTL INC, you can compare the effects of market volatilities on Microsoft and MARRIOTT 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 MARRIOTT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and MARRIOTT.
Diversification Opportunities for Microsoft and MARRIOTT
Very good diversification
The 3 months correlation between Microsoft and MARRIOTT is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and MARRIOTT INTL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MARRIOTT INTL INC 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 MARRIOTT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MARRIOTT INTL INC has no effect on the direction of Microsoft i.e., Microsoft and MARRIOTT go up and down completely randomly.
Pair Corralation between Microsoft and MARRIOTT
Given the investment horizon of 90 days Microsoft is expected to generate 0.39 times more return on investment than MARRIOTT. However, Microsoft is 2.55 times less risky than MARRIOTT. It trades about 0.03 of its potential returns per unit of risk. MARRIOTT INTL INC is currently generating about -0.09 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 829.00 from holding Microsoft or generate 1.94% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 57.81% |
Values | Daily Returns |
Microsoft vs. MARRIOTT INTL INC
Performance |
Timeline |
Microsoft |
MARRIOTT INTL INC |
Microsoft and MARRIOTT Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Microsoft and MARRIOTT
The main advantage of trading using opposite Microsoft and MARRIOTT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, MARRIOTT 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 MARRIOTT will offset losses from the drop in MARRIOTT's long position.Microsoft vs. BlackBerry | Microsoft vs. Global Blue Group | Microsoft vs. Aurora Mobile | Microsoft vs. Marqeta |
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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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