Correlation Between Resource America and Microsoft

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Resource America and Microsoft 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 Resource America and Microsoft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Resource America and Microsoft, you can compare the effects of market volatilities on Resource America and Microsoft 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 Resource America with a short position of Microsoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Resource America and Microsoft.

Diversification Opportunities for Resource America and Microsoft

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Resource America and Microsoft

If you would invest  40,748  in Microsoft on December 29, 2023 and sell it today you would earn a total of  1,395  from holding Microsoft or generate 3.42% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Resource America  vs.  Microsoft

 Performance 
       Timeline  
Resource America 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Resource America has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Resource America is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.
Microsoft 

Risk-Adjusted Performance

12 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Microsoft may actually be approaching a critical reversion point that can send shares even higher in April 2024.

Resource America and Microsoft Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Resource America and Microsoft

The main advantage of trading using opposite Resource America and Microsoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Resource America position performs unexpectedly, Microsoft 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 Microsoft will offset losses from the drop in Microsoft's long position.
The idea behind Resource America and Microsoft 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.
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

Other Complementary Tools

AI Investment Finder
Use AI to screen and filter profitable investment opportunities
Commodity Directory
Find actively traded commodities issued by global exchanges
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Money Managers
Screen money managers from public funds and ETFs managed around the world
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets