Correlation Between Mineral Hill and Microsoft

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

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

Diversification Opportunities for Mineral Hill and Microsoft

-0.25

Correlation Coefficient

Mineral Hill  Microsoft

Very good diversification

The 3 months correlation between Mineral and Microsoft is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Mineral Hill Industries and Microsoft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microsoft and Mineral Hill 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 Mineral Hill Industries 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 Mineral Hill i.e., Mineral Hill and Microsoft go up and down completely randomly.

Pair Corralation between Mineral Hill and Microsoft

If you would invest  40,024  in Microsoft on February 21, 2024 and sell it today you would earn a total of  2,510  from holding Microsoft or generate 6.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Mineral Hill Industries  vs.  Microsoft

Mineral Hill Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mineral Hill Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Microsoft

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 6 (%) 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 Mineral Hill and Microsoft

The main advantage of trading using opposite Mineral Hill and Microsoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mineral Hill 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 Mineral Hill Industries 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.