Correlation Analysis Between Microsoft and Shanghai

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

 Predicted Return Density 
      Returns 

Microsoft Corp.  vs.  Shanghai

 Performance (%) 
      Timeline 

Pair Volatility

Given the investment horizon of 30 days, Microsoft Corporation is expected to generate 1.18 times more return on investment than Shanghai. However, Microsoft is 1.18 times more volatile than Shanghai. It trades about 0.11 of its potential returns per unit of risk. Shanghai is currently generating about 0.01 per unit of risk. If you would invest  13,841  in Microsoft Corporation on October 18, 2019 and sell it today you would earn a total of  1,156  from holding Microsoft Corporation or generate 8.35% return on investment over 30 days.

Pair Corralation between Microsoft and Shanghai

0.28
Time Period3 Months [change]
DirectionPositive 
StrengthVery Weak
Accuracy90.77%
ValuesDaily Returns

Diversification Opportunities for Microsoft and Shanghai

Microsoft Corp. diversification synergy

Modest diversification

Overlapping area represents the amount of risk that can be diversified away by holding Microsoft Corp. and Shanghai in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Shanghai 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 Shanghai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai has no effect on the direction of Microsoft i.e. Microsoft and Shanghai go up and down completely randomly.
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See also your portfolio center. Please also try Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.


 
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