Correlation Between IShares 1 and Microsoft

Can any of the company-specific risk be diversified away by investing in both IShares 1 and Microsoft 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 IShares 1 and Microsoft into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between IShares 1 5 Year and Microsoft, you can compare the effects of market volatilities on IShares 1 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 IShares 1 with a short position of Microsoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares 1 and Microsoft.

Diversification Opportunities for IShares 1 and Microsoft

0.0

Correlation Coefficient

IShares 1  Microsoft

Pay attention - limited upside

The 3 months correlation between IShares and Microsoft is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding IShares 1 5 Year and Microsoft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microsoft and IShares 1 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 IShares 1 5 Year 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 IShares 1 i.e., IShares 1 and Microsoft go up and down completely randomly.

Pair Corralation between IShares 1 and Microsoft

If you would invest  0.00  in IShares 1 5 Year on January 26, 2024 and sell it today you would earn a total of  0.00  from holding IShares 1 5 Year or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

IShares 1 5 Year  vs.  Microsoft

IShares 1 5

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IShares 1 5 Year has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, IShares 1 is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Microsoft

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Microsoft is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with IShares 1 and Microsoft

The main advantage of trading using opposite IShares 1 and Microsoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares 1 position performs unexpectedly, Microsoft 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 Microsoft will offset losses from the drop in Microsoft's long position.

The idea behind IShares 1 5 Year and Microsoft 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.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.