Correlation Between Microsoft and Guidepath Multi
Can any of the company-specific risk be diversified away by investing in both Microsoft and Guidepath Multi 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 Guidepath Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Guidepath Multi Asset Income, you can compare the effects of market volatilities on Microsoft and Guidepath Multi 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 Guidepath Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Guidepath Multi.
Diversification Opportunities for Microsoft and Guidepath Multi
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Microsoft and Guidepath is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Guidepath Multi Asset Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidepath Multi Asset 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 Guidepath Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidepath Multi Asset has no effect on the direction of Microsoft i.e., Microsoft and Guidepath Multi go up and down completely randomly.
Pair Corralation between Microsoft and Guidepath Multi
Given the investment horizon of 90 days Microsoft is expected to generate 3.21 times more return on investment than Guidepath Multi. However, Microsoft is 3.21 times more volatile than Guidepath Multi Asset Income. It trades about 0.37 of its potential returns per unit of risk. Guidepath Multi Asset Income is currently generating about 0.25 per unit of risk. If you would invest 39,044 in Microsoft on April 28, 2025 and sell it today you would earn a total of 12,327 from holding Microsoft or generate 31.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Microsoft vs. Guidepath Multi Asset Income
Performance |
Timeline |
Microsoft |
Guidepath Multi Asset |
Microsoft and Guidepath Multi Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Microsoft and Guidepath Multi
The main advantage of trading using opposite Microsoft and Guidepath Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Guidepath Multi 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 Guidepath Multi will offset losses from the drop in Guidepath Multi's long position.Microsoft vs. Palantir Technologies Class | Microsoft vs. Crowdstrike Holdings | Microsoft vs. Oracle | Microsoft vs. CoreWeave, Class A |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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