Correlation Between Microsoft and Future Fintech
Can any of the company-specific risk be diversified away by investing in both Microsoft and Future Fintech 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 Future Fintech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Future Fintech Group, you can compare the effects of market volatilities on Microsoft and Future Fintech 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 Future Fintech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Future Fintech.
Diversification Opportunities for Microsoft and Future Fintech
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microsoft and Future is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Future Fintech Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Future Fintech Group 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 Future Fintech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Future Fintech Group has no effect on the direction of Microsoft i.e., Microsoft and Future Fintech go up and down completely randomly.
Pair Corralation between Microsoft and Future Fintech
Given the investment horizon of 90 days Microsoft is expected to generate 0.12 times more return on investment than Future Fintech. However, Microsoft is 8.53 times less risky than Future Fintech. It trades about 0.53 of its potential returns per unit of risk. Future Fintech Group is currently generating about -0.14 per unit of risk. If you would invest 46,197 in Microsoft on April 1, 2025 and sell it today you would earn a total of 3,397 from holding Microsoft or generate 7.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Microsoft vs. Future Fintech Group
Performance |
| Timeline |
| Microsoft |
| Future Fintech Group |
Microsoft and Future Fintech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Future Fintech
The main advantage of trading using opposite Microsoft and Future Fintech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Future Fintech 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 Future Fintech will offset losses from the drop in Future Fintech's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Adobe Systems Incorporated | Microsoft vs. Crowdstrike Holdings |
| Future Fintech vs. DatChat | Future Fintech vs. MMTEC Inc | Future Fintech vs. Creative Realities | Future Fintech vs. Marin Software |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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