Correlation Between BlackBerry and Microsoft

By analyzing existing cross correlation between BlackBerry Limited and Microsoft you can compare the effects of market volatilities on BlackBerry 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 BlackBerry with a short position of Microsoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackBerry and Microsoft.

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Can any of the company-specific risk be diversified away by investing in both BlackBerry and Microsoft at the same time? Although using correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combing BlackBerry and Microsoft into the same portfolio which is an essential part of fundamental portfolio management process.

Diversification Opportunities for BlackBerry and Microsoft

0.59
Correlation
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Very weak diversification

The 3 months correlation between BlackBerry and Microsoft is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding BlackBerry Limited and Microsoft Corp. in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Microsoft and BlackBerry 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 BlackBerry Limited 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 BlackBerry i.e. BlackBerry and Microsoft go up and down completely randomly.

Pair Corralation between BlackBerry and Microsoft

Allowing for the 30-days total investment horizon, BlackBerry Limited is expected to under-perform the Microsoft. In addition to that, BlackBerry is 1.45 times more volatile than Microsoft. It trades about -0.02 of its total potential returns per unit of risk. Microsoft is currently generating about 0.05 per unit of volatility. If you would invest  17,089  in Microsoft on April 24, 2020 and sell it today you would earn a total of  1,262  from holding Microsoft or generate 7.38% return on investment over 30 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

BlackBerry Limited  vs.  Microsoft Corp.

 Performance (%) 
      Timeline 
BlackBerry Limited 
00

BlackBerry Risk-Adjusted Performance

Over the last 30 days BlackBerry Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest sluggish performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
Microsoft 
33

Microsoft Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 3 (%) of all global equities and portfolios over the last 30 days. In spite of comparatively sluggish essential indicators, Microsoft unveiled solid returns over the last few months and may actually be approaching a breakup point.

BlackBerry and Microsoft Volatility Contrast

 Predicted Return Density 
      Returns 
Check out your portfolio center. Please also try Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.


 
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