Correlation Analysis Between Microsoft and Facebook

Analyzing existing cross correlation between Microsoft Corporation and Facebook. You can compare the effects of market volatilities on Microsoft and Facebook 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 Facebook. See also your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Facebook.
Horizon     30 Days    Login   to change
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Comparative Performance

Microsoft  
2424

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft Corporation are ranked lower than 24 (%) of all global equities and portfolios over the last 30 days. In spite of comparatively weak essential indicators, Microsoft unveiled solid returns over the last few months and may actually be approaching a breakup point.
Facebook  
1515

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Facebook are ranked lower than 15 (%) of all global equities and portfolios over the last 30 days. Despite somewhat unfluctuating basic indicators, Facebook sustained solid returns over the last few months and may actually be approaching a breakup point.

Microsoft and Facebook Volatility Contrast

 Predicted Return Density 
    
  Returns 

Microsoft Corp.  vs.  Facebook Inc

 Performance (%) 
    
  Timeline 

Pair Volatility

Given the investment horizon of 30 days, Microsoft Corporation is expected to generate 0.72 times more return on investment than Facebook. However, Microsoft Corporation is 1.4 times less risky than Facebook. It trades about 0.36 of its potential returns per unit of risk. Facebook is currently generating about 0.22 per unit of risk. If you would invest  13,843  in Microsoft Corporation on December 20, 2019 and sell it today you would earn a total of  2,867  from holding Microsoft Corporation or generate 20.71% return on investment over 30 days.

Pair Corralation between Microsoft and Facebook

0.95
Time Period3 Months [change]
DirectionPositive 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Diversification Opportunities for Microsoft and Facebook

Microsoft Corp. diversification synergy

Almost no diversification

Overlapping area represents the amount of risk that can be diversified away by holding Microsoft Corp. and Facebook Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Facebook 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 Corporation are associated (or correlated) with Facebook. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Facebook has no effect on the direction of Microsoft i.e. Microsoft and Facebook go up and down completely randomly.
See also your portfolio center. Please also try Idea Breakdown module to analyze constituents of all macroaxis ideas. macroaxis investment ideas are predefined, sector-focused investing themes.