Correlation Between Microsoft and IShares Asia
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 Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Microsoft vs. IShares Asia Trust
Performance |
Timeline |
Microsoft |
IShares Asia Trust |
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.Microsoft vs. Global Blue Group | Microsoft vs. Aurora Mobile | Microsoft vs. Marqeta | Microsoft vs. Nextnav Acquisition Corp |
IShares Asia vs. Vanguard Value Index | IShares Asia vs. Vanguard FTSE Developed | IShares Asia vs. Vanguard Small Cap Index | IShares Asia vs. Vanguard Mid Cap Index |
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.
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