Pair Correlation Between VMware and Microsoft

This module allows you to analyze existing cross correlation between VMware Inc and Microsoft Corporation. You can compare the effects of market volatilities on VMware and Microsoft 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 VMware with a short position of Microsoft. See also your portfolio center. Please also check ongoing floating volatility patterns of VMware and Microsoft.
Investment Horizon     30 Days    Login   to change
Symbolsvs
 VMware Inc.  vs   Microsoft Corp.
 Performance (%) 
Benchmark  Embed    Timeline 

Pair Volatility

Considering 30-days investment horizon, VMware is expected to generate 3.4 times less return on investment than Microsoft. In addition to that, VMware is 1.42 times more volatile than Microsoft Corporation. It trades about 0.07 of its total potential returns per unit of risk. Microsoft Corporation is currently generating about 0.35 per unit of volatility. If you would invest  6,510  in Microsoft Corporation on March 27, 2017 and sell it today you would earn a total of  282.00  from holding Microsoft Corporation or generate 4.33% return on investment over 30 days.

Correlation Coefficient

Pair Corralation between VMware and Microsoft
0.69

Parameters

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

Diversification

Poor diversification

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

Comparative Volatility

 Predicted Return Density 
Benchmark  Embed    Returns 

VMware Inc

  
5 

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in VMware Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 30 days.

Microsoft

  
24 

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft Corporation are ranked lower than 24 (%) of all global equities and portfolios over the last 30 days.