This module allows you to analyze existing cross correlation between Microsoft Corporation and Expedia Inc. You can compare the effects of market volatilities on Microsoft and Expedia 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 Expedia. See also your portfolio center
. Please also check ongoing floating volatility patterns of Microsoft
Microsoft Corp. vs Expedia Inc
Given the investment horizon of 30 days, Microsoft Corporation is expected to generate 0.86 times more return on investment than Expedia. However, Microsoft Corporation is 1.17 times less risky than Expedia. It trades about 0.25 of its potential returns per unit of risk. Expedia Inc is currently generating about 0.14 per unit of risk. If you would invest 7,027 in Microsoft Corporation on June 21, 2017 and sell it today you would earn a total of 397.00 from holding Microsoft Corporation or generate 5.65% return on investment over 30 days.
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Almost no diversification
Overlapping area represents the amount of risk that can be diversified away by holding Microsoft Corp. and Expedia Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Expedia 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 Corporation are associated (or correlated) with Expedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expedia Inc has no effect on the direction of Microsoft i.e. Microsoft and Expedia go up and down completely randomly.
Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft Corporation are ranked lower than 17 (%) of all global equities and portfolios over the last 30 days.
Compared to the overall equity markets, risk-adjusted returns on investments in Expedia Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 30 days.