Correlation Between Microsoft and Tiffany
Can any of the company-specific risk be diversified away by investing in both Microsoft and Tiffany 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 Tiffany into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Tiffany Co, you can compare the effects of market volatilities on Microsoft and Tiffany 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 Tiffany. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Tiffany.
Diversification Opportunities for Microsoft and Tiffany
Pay attention - limited upside
The 3 months correlation between Microsoft and Tiffany is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Tiffany Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiffany 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 Tiffany. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tiffany has no effect on the direction of Microsoft i.e., Microsoft and Tiffany go up and down completely randomly.
Pair Corralation between Microsoft and Tiffany
If you would invest 33,384 in Microsoft on January 24, 2024 and sell it today you would earn a total of 6,712 from holding Microsoft or generate 20.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Microsoft vs. Tiffany Co
Performance |
| Timeline |
| Microsoft |
| Tiffany |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Microsoft and Tiffany Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Tiffany
The main advantage of trading using opposite Microsoft and Tiffany positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Tiffany 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 Tiffany will offset losses from the drop in Tiffany's long position.| Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated | Microsoft vs. Crowdstrike Holdings | Microsoft vs. Cloudflare |
| Tiffany vs. BioNTech SE | Tiffany vs. Regeneron Pharmaceuticals | Tiffany vs. Catalyst Pharmaceuticals | Tiffany vs. Coupang LLC |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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