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 is expected to generate 3.54 times less return on investment than Expedia. But when comparing it to its historical volatility, Microsoft Corporation is 1.35 times less risky than Expedia. It trades about 0.11 of its potential returns per unit of risk. Expedia Inc is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 13,372 in Expedia Inc on April 28, 2017 and sell it today you would earn a total of 1,086 from holding Expedia Inc or generate 8.12% return on investment over 30 days.
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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 7 (%) 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 20 (%) of all global equities and portfolios over the last 30 days.