Correlation Between Microsoft and IShares Asia

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Microsoft and IShares Asia 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 IShares Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and IShares Asia Trust, you can compare the effects of market volatilities on Microsoft and IShares Asia 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 IShares Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and IShares Asia.

Diversification Opportunities for Microsoft and IShares Asia

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Microsoft and IShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and IShares Asia Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IShares Asia Trust 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 IShares Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IShares Asia Trust has no effect on the direction of Microsoft i.e., Microsoft and IShares Asia go up and down completely randomly.

Pair Corralation between Microsoft and IShares Asia

If you would invest  40,748  in Microsoft on December 29, 2023 and sell it today you would earn a total of  1,395  from holding Microsoft or generate 3.42% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Microsoft  vs.  IShares Asia Trust

 Performance 
       Timeline  
Microsoft 

Risk-Adjusted Performance

12 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Microsoft may actually be approaching a critical reversion point that can send shares even higher in April 2024.
IShares Asia Trust 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days IShares Asia Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, IShares Asia is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Microsoft and IShares Asia Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Microsoft and IShares Asia

The main advantage of trading using opposite Microsoft and IShares Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, IShares Asia 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 IShares Asia will offset losses from the drop in IShares Asia's long position.
The idea behind Microsoft and IShares Asia Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

Other Complementary Tools

Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Equity Valuation
Check real value of public entities based on technical and fundamental data
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Transaction History
View history of all your transactions and understand their impact on performance
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk