Correlation Analysis Between Microsoft and Red Hat

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

Microsoft Corp.  vs.  Red Hat Inc

 Performance (%) 
      Timeline 

Pair Volatility

Given the investment horizon of 30 days, Microsoft Corporation is expected to generate 0.51 times more return on investment than Red Hat. However, Microsoft Corporation is 1.97 times less risky than Red Hat. It trades about 0.18 of its potential returns per unit of risk. Red Hat is currently generating about -0.11 per unit of risk. If you would invest  10,960  in Microsoft Corporation on August 25, 2018 and sell it today you would earn a total of  466.00  from holding Microsoft Corporation or generate 4.25% return on investment over 30 days.

Pair Corralation between Microsoft and Red Hat

-0.1
Time Period1 Month [change]
DirectionNegative 
StrengthInsignificant
Accuracy95.24%
ValuesDaily Returns

Diversification

Good diversification

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

Comparative Volatility

 Predicted Return Density 
      Returns 
Microsoft  
11 

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft Corporation are ranked lower than 11 (%) of all global equities and portfolios over the last 30 days.
Red Hat  
0 

Risk-Adjusted Performance

Over the last 30 days Red Hat has generated negative risk-adjusted returns adding no value to investors with long positions.

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GOOG - USA Stock
Alphabet
Specialization
IT, Search Cloud And Integrated IT Services
Business Address1600 Amphitheatre Parkway
ExchangeNASDAQ
$1166.09

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