Pair Correlation Between Microsoft and Expedia

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 and Expedia.
Investment Horizon     30 Days    Login   to change
Symbolsvs
 Microsoft Corp.  vs   Expedia Inc
 Performance (%) 
      Timeline 

Pair Volatility

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.

Correlation Coefficient

Pair Corralation between Microsoft and Expedia
0.91

Parameters

Time Period1 Month [change]
DirectionPositive 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Diversification

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.

Comparative Volatility

 Predicted Return Density 
      Returns 

Microsoft

  
17 

Risk-Adjusted Performance

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.

Expedia Inc

  
9 

Risk-Adjusted Performance

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.