Correlation Between Microsoft and Menora Miv
Can any of the company-specific risk be diversified away by investing in both Microsoft and Menora Miv 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 Menora Miv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Menora Miv Hld, you can compare the effects of market volatilities on Microsoft and Menora Miv 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 Menora Miv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Menora Miv.
Diversification Opportunities for Microsoft and Menora Miv
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Microsoft and Menora is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Menora Miv Hld in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Menora Miv Hld 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 Menora Miv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Menora Miv Hld has no effect on the direction of Microsoft i.e., Microsoft and Menora Miv go up and down completely randomly.
Pair Corralation between Microsoft and Menora Miv
Given the investment horizon of 90 days Microsoft is expected to generate 0.63 times more return on investment than Menora Miv. However, Microsoft is 1.59 times less risky than Menora Miv. It trades about -0.14 of its potential returns per unit of risk. Menora Miv Hld is currently generating about -0.25 per unit of risk. If you would invest 42,165 in Microsoft on January 26, 2024 and sell it today you would lose (1,259) from holding Microsoft or give up 2.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 76.19% |
| Values | Daily Returns |
Microsoft vs. Menora Miv Hld
Performance |
| Timeline |
| Microsoft |
| Menora Miv Hld |
Microsoft and Menora Miv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Menora Miv
The main advantage of trading using opposite Microsoft and Menora Miv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Menora Miv 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 Menora Miv will offset losses from the drop in Menora Miv's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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