Correlation Analysis Between Microsoft and EURONEXT BEL-20

This module allows you to analyze existing cross correlation between Microsoft Corporation and EURONEXT BEL-20. You can compare the effects of market volatilities on Microsoft and EURONEXT BEL-20 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 EURONEXT BEL-20. See also your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and EURONEXT BEL-20.
Horizon     30 Days    Login   to change
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Comparative Performance

 Predicted Return Density 
      Returns 

Microsoft Corp.  vs.  EURONEXT BEL-20

 Performance (%) 
      Timeline 

Pair Volatility

Given the investment horizon of 30 days, Microsoft is expected to generate 1.27 times less return on investment than EURONEXT BEL-20. In addition to that, Microsoft is 1.01 times more volatile than EURONEXT BEL-20. It trades about 0.12 of its total potential returns per unit of risk. EURONEXT BEL-20 is currently generating about 0.16 per unit of volatility. If you would invest  345,420  in EURONEXT BEL-20 on October 13, 2019 and sell it today you would earn a total of  41,407  from holding EURONEXT BEL-20 or generate 11.99% return on investment over 30 days.

Pair Corralation between Microsoft and EURONEXT BEL-20

0.79
Time Period3 Months [change]
DirectionPositive 
StrengthSignificant
Accuracy98.44%
ValuesDaily Returns

Diversification Opportunities for Microsoft and EURONEXT BEL-20

Microsoft Corp. diversification synergy

Poor diversification

Overlapping area represents the amount of risk that can be diversified away by holding Microsoft Corp. and EURONEXT BEL-20 in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on EURONEXT BEL-20 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 Corporation are associated (or correlated) with EURONEXT BEL-20. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EURONEXT BEL-20 has no effect on the direction of Microsoft i.e. Microsoft and EURONEXT BEL-20 go up and down completely randomly.
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