Correlation Between Microsoft and Interroll Holding
Can any of the company-specific risk be diversified away by investing in both Microsoft and Interroll Holding 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 Interroll Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Interroll Holding AG, you can compare the effects of market volatilities on Microsoft and Interroll Holding 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 Interroll Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Interroll Holding.
Diversification Opportunities for Microsoft and Interroll Holding
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Microsoft and Interroll is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Interroll Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interroll Holding 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 Interroll Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interroll Holding has no effect on the direction of Microsoft i.e., Microsoft and Interroll Holding go up and down completely randomly.
Pair Corralation between Microsoft and Interroll Holding
Given the investment horizon of 90 days Microsoft is expected to generate 1.31 times less return on investment than Interroll Holding. But when comparing it to its historical volatility, Microsoft is 1.88 times less risky than Interroll Holding. It trades about 0.35 of its potential returns per unit of risk. Interroll Holding AG is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 177,100 in Interroll Holding AG on April 30, 2025 and sell it today you would earn a total of 69,900 from holding Interroll Holding AG or generate 39.47% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Microsoft vs. Interroll Holding AG
Performance |
Timeline |
Microsoft |
Interroll Holding |
Microsoft and Interroll Holding Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Microsoft and Interroll Holding
The main advantage of trading using opposite Microsoft and Interroll Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Interroll Holding 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 Interroll Holding will offset losses from the drop in Interroll Holding'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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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