Correlation Between Cliffwater Enhanced and Microsoft Corp

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

Diversification Opportunities for Cliffwater Enhanced and Microsoft Corp

-0.59
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Cliffwater and Microsoft is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Cliffwater Enhanced Lending and Microsoft Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microsoft Corp and Cliffwater Enhanced 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 Cliffwater Enhanced Lending are associated (or correlated) with Microsoft Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microsoft Corp has no effect on the direction of Cliffwater Enhanced i.e., Cliffwater Enhanced and Microsoft Corp go up and down completely randomly.

Pair Corralation between Cliffwater Enhanced and Microsoft Corp

Assuming the 90 days horizon Cliffwater Enhanced is expected to generate 15.5 times less return on investment than Microsoft Corp. But when comparing it to its historical volatility, Cliffwater Enhanced Lending is 49.29 times less risky than Microsoft Corp. It trades about 0.56 of its potential returns per unit of risk. Microsoft Corp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  22,611  in Microsoft Corp on August 28, 2022 and sell it today you would earn a total of  2,138  from holding Microsoft Corp or generate 9.46% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy95.45%
ValuesDaily Returns

Cliffwater Enhanced Lending  vs.  Microsoft Corp

 Performance (%) 
       Timeline  
Cliffwater Enhanced 
Cliffwater Performance
41 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Cliffwater Enhanced Lending are ranked lower than 41 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Cliffwater Enhanced is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Cliffwater Price Channel

Microsoft Corp 
Microsoft Performance
0 of 100
Over the last 90 days Microsoft Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Microsoft Corp is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Microsoft Price Channel

Cliffwater Enhanced and Microsoft Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cliffwater Enhanced and Microsoft Corp

The main advantage of trading using opposite Cliffwater Enhanced and Microsoft Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cliffwater Enhanced position performs unexpectedly, Microsoft Corp 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 Corp will offset losses from the drop in Microsoft Corp's long position.
Cliffwater Enhanced vs. Vanguard Total Stock
Cliffwater Enhanced vs. Vanguard Total Stock
Cliffwater Enhanced vs. Vanguard Total Stock
Cliffwater Enhanced vs. Vanguard Index Trust
The idea behind Cliffwater Enhanced Lending and Microsoft Corp 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.
Microsoft Corp vs. Fiserv Inc
Microsoft Corp vs. Mind CTI
Microsoft Corp vs. Caci International
Microsoft Corp vs. Cadence Design Sys
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

Other Complementary Tools

Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go
Watchlist Optimization
Optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm
Go
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Go
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Go
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Go
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Go