Correlation Between Microsoft and Shapeways Holdings
Can any of the company-specific risk be diversified away by investing in both Microsoft and Shapeways Holdings 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 Shapeways Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Shapeways Holdings Common, you can compare the effects of market volatilities on Microsoft and Shapeways Holdings 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 Shapeways Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Shapeways Holdings.
Diversification Opportunities for Microsoft and Shapeways Holdings
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Microsoft and Shapeways is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Shapeways Holdings Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shapeways Holdings Common 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 Shapeways Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shapeways Holdings Common has no effect on the direction of Microsoft i.e., Microsoft and Shapeways Holdings go up and down completely randomly.
Pair Corralation between Microsoft and Shapeways Holdings
Given the investment horizon of 90 days Microsoft is expected to generate 0.33 times more return on investment than Shapeways Holdings. However, Microsoft is 3.04 times less risky than Shapeways Holdings. It trades about -0.14 of its potential returns per unit of risk. Shapeways Holdings Common is currently generating about -0.19 per unit of risk. If you would invest 42,552 in Microsoft on February 5, 2024 and sell it today you would lose (1,886) from holding Microsoft or give up 4.43% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Microsoft vs. Shapeways Holdings Common
Performance |
Timeline |
Microsoft |
Shapeways Holdings Common |
Microsoft and Shapeways Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Microsoft and Shapeways Holdings
The main advantage of trading using opposite Microsoft and Shapeways Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Shapeways Holdings 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 Shapeways Holdings will offset losses from the drop in Shapeways Holdings' long position.Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
Shapeways Holdings vs. Nuburu Inc | Shapeways Holdings vs. Laser Photonics | Shapeways Holdings vs. Reelcause | Shapeways Holdings vs. Quality Industrial Corp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |