Correlation Between Microsoft and Golf
Can any of the company-specific risk be diversified away by investing in both Microsoft and Golf at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Microsoft and Golf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Golf Co Group, you can compare the effects of market volatilities on Microsoft and Golf 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 Golf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Golf.
Diversification Opportunities for Microsoft and Golf
Very weak diversification
The 3 months correlation between Microsoft and Golf is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Golf Co Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golf Co Group 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 are associated (or correlated) with Golf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golf Co Group has no effect on the direction of Microsoft i.e., Microsoft and Golf go up and down completely randomly.
Pair Corralation between Microsoft and Golf
Given the investment horizon of 90 days Microsoft is expected to generate 0.25 times more return on investment than Golf. However, Microsoft is 4.08 times less risky than Golf. It trades about 0.13 of its potential returns per unit of risk. Golf Co Group is currently generating about 0.01 per unit of risk. If you would invest 24,000 in Microsoft on January 17, 2024 and sell it today you would earn a total of 17,458 from holding Microsoft or generate 72.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 79.35% |
| Values | Daily Returns |
Microsoft vs. Golf Co Group
Performance |
| Timeline |
| Microsoft |
| Golf Co Group |
Microsoft and Golf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Golf
The main advantage of trading using opposite Microsoft and Golf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Golf can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Golf will offset losses from the drop in Golf's long position.| Microsoft vs. Cloudflare | Microsoft vs. Okta Inc | Microsoft vs. Adobe Systems Incorporated | Microsoft vs. Nutanix |
| Golf vs. Bank Leumi Le Israel | Golf vs. Azrieli Group | Golf vs. Mizrahi Tefahot | Golf vs. Israel Discount Bank |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |