This module allows you to analyze existing cross correlation between Red Hat Inc and Microsoft Corporation. You can compare the effects of market volatilities on Red Hat and Microsoft 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 Red Hat with a short position of Microsoft. See also your portfolio center
. Please also check ongoing floating volatility patterns of Red Hat
Red Hat Inc vs Microsoft Corp.
Considering 30-days investment horizon, Red Hat is expected to generate 1.56 times less return on investment than Microsoft. But when comparing it to its historical volatility, Red Hat Inc is 1.99 times less risky than Microsoft. It trades about 0.22 of its potential returns per unit of risk. Microsoft Corporation is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 7,791 in Microsoft Corporation on October 19, 2017 and sell it today you would earn a total of 449 from holding Microsoft Corporation or generate 5.76% return on investment over 30 days.
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Overlapping area represents the amount of risk that can be diversified away by holding Red Hat Inc and Microsoft Corp. in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Microsoft and Red Hat 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 Red Hat Inc are associated (or correlated) with Microsoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microsoft has no effect on the direction of Red Hat i.e. Red Hat and Microsoft go up and down completely randomly.
Compared to the overall equity markets, risk-adjusted returns on investments in Red Hat Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 30 days.
Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft Corporation are ranked lower than 11 (%) of all global equities and portfolios over the last 30 days.