Correlation Between Microsoft and Fireeye
Can any of the company-specific risk be diversified away by investing in both Microsoft and Fireeye 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 Fireeye into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Fireeye, you can compare the effects of market volatilities on Microsoft and Fireeye 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 Fireeye. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Fireeye.
Diversification Opportunities for Microsoft and Fireeye
Pay attention - limited upside
The 3 months correlation between Microsoft and Fireeye is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Fireeye in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fireeye 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 Fireeye. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fireeye has no effect on the direction of Microsoft i.e., Microsoft and Fireeye go up and down completely randomly.
Pair Corralation between Microsoft and Fireeye
If you would invest 0.00 in Fireeye on January 20, 2024 and sell it today you would earn a total of 0.00 from holding Fireeye or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Microsoft vs. Fireeye
Performance |
| Timeline |
| Microsoft |
| Fireeye |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Microsoft and Fireeye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Fireeye
The main advantage of trading using opposite Microsoft and Fireeye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Fireeye 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 Fireeye will offset losses from the drop in Fireeye's long position.| Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated | Microsoft vs. Crowdstrike Holdings | Microsoft vs. Cloudflare |
| Fireeye vs. Hawaiian Holdings | Fireeye vs. Allegiant Travel | Fireeye vs. Mesa Air Group | Fireeye vs. NETGEAR |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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