Correlation Analysis Between Microsoft and All Ords

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

 Predicted Return Density 
      Returns 

Microsoft Corp.  vs.  All Ords

 Performance (%) 
      Timeline 

Pair Volatility

Given the investment horizon of 30 days, Microsoft Corporation is expected to generate 2.17 times more return on investment than All Ords. However, Microsoft is 2.17 times more volatile than All Ords. It trades about 0.18 of its potential returns per unit of risk. All Ords is currently generating about 0.3 per unit of risk. If you would invest  10,771  in Microsoft Corporation on February 17, 2019 and sell it today you would earn a total of  986.00  from holding Microsoft Corporation or generate 9.15% return on investment over 30 days.

Pair Corralation between Microsoft and All Ords

0.82
Time Period2 Months [change]
DirectionPositive 
StrengthStrong
Accuracy82.5%
ValuesDaily Returns

Diversification Opportunities for Microsoft and All Ords

Microsoft Corp. diversification synergy

Very poor diversification

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