Correlation Between Microsoft and Emera Incorporated
Can any of the company-specific risk be diversified away by investing in both Microsoft and Emera Incorporated 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 Emera Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Emera Incorporated, you can compare the effects of market volatilities on Microsoft and Emera Incorporated 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 Emera Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Emera Incorporated.
Diversification Opportunities for Microsoft and Emera Incorporated
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Microsoft and Emera is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Emera Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emera Incorporated 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 Emera Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emera Incorporated has no effect on the direction of Microsoft i.e., Microsoft and Emera Incorporated go up and down completely randomly.
Pair Corralation between Microsoft and Emera Incorporated
If you would invest 40,182 in Microsoft on January 24, 2024 and sell it today you would earn a total of 575.00 from holding Microsoft or generate 1.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Microsoft vs. Emera Incorporated
Performance |
Timeline |
Microsoft |
Emera Incorporated |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Microsoft and Emera Incorporated Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Microsoft and Emera Incorporated
The main advantage of trading using opposite Microsoft and Emera Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Emera Incorporated 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 Emera Incorporated will offset losses from the drop in Emera Incorporated's long position.Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated | Microsoft vs. Crowdstrike Holdings | Microsoft vs. Cloudflare |
Emera Incorporated vs. United Rentals | Emera Incorporated vs. Broadstone Net LeaseInc | Emera Incorporated vs. Global Ship Lease | Emera Incorporated vs. Radcom |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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