Correlation Between Microsoft Corp and MELROSE INDUSTRIES

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Can any of the company-specific risk be diversified away by investing in both Microsoft Corp and MELROSE INDUSTRIES 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 Corp and MELROSE INDUSTRIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft Corp and MELROSE INDUSTRIES PLC, you can compare the effects of market volatilities on Microsoft Corp and MELROSE INDUSTRIES 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 Corp with a short position of MELROSE INDUSTRIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft Corp and MELROSE INDUSTRIES.

Diversification Opportunities for Microsoft Corp and MELROSE INDUSTRIES

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Microsoft and MELROSE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft Corp and MELROSE INDUSTRIES PLC ORDS 48 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MELROSE INDUSTRIES PLC and Microsoft Corp 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 Corp are associated (or correlated) with MELROSE INDUSTRIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MELROSE INDUSTRIES PLC has no effect on the direction of Microsoft Corp i.e., Microsoft Corp and MELROSE INDUSTRIES go up and down completely randomly.

Pair Corralation between Microsoft Corp and MELROSE INDUSTRIES

If you would invest (100.00)  in MELROSE INDUSTRIES PLC on July 5, 2022 and sell it today you would earn a total of  100.00  from holding MELROSE INDUSTRIES PLC or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Microsoft Corp  vs.  MELROSE INDUSTRIES PLC ORDS 48

 Performance (%) 
       Timeline  
Microsoft Corp 
Microsoft Performance
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Over the last 90 days Microsoft Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Microsoft Price Channel

MELROSE INDUSTRIES PLC 
MELROSE Performance
0 of 100
Over the last 90 days MELROSE INDUSTRIES PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady basic indicators, MELROSE INDUSTRIES is not utilizing all of its potentials. The new stock price chaos, may contribute to medium-term losses for the stakeholders.

Microsoft Corp and MELROSE INDUSTRIES Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Microsoft Corp and MELROSE INDUSTRIES

The main advantage of trading using opposite Microsoft Corp and MELROSE INDUSTRIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft Corp position performs unexpectedly, MELROSE INDUSTRIES 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 MELROSE INDUSTRIES will offset losses from the drop in MELROSE INDUSTRIES's long position.
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The idea behind Microsoft Corp and MELROSE INDUSTRIES PLC 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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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 Stock Screener module to find equities using custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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