Correlation Between Microsoft and Vivic Corp

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

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

Diversification Opportunities for Microsoft and Vivic Corp

0.0

Correlation Coefficient

Microsoft  Vivic Corp

Pay attention - limited upside

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

Pair Corralation between Microsoft and Vivic Corp

Given the investment horizon of 90 days Microsoft is expected to generate 32.6 times less return on investment than Vivic Corp. But when comparing it to its historical volatility, Microsoft is 9.39 times less risky than Vivic Corp. It trades about 0.03 of its potential returns per unit of risk. Vivic Corp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  276.00  in Vivic Corp on September 28, 2024 and sell it today you would earn a total of  124.00  from holding Vivic Corp or generate 44.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Microsoft  vs.  Vivic Corp

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.

Vivic Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vivic Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Vivic Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Microsoft and Vivic Corp

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

The idea behind Microsoft and Vivic Corp 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.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.