Correlation Between Micro Focus and Starbucks Corp

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

Diversification Opportunities for Micro Focus and Starbucks Corp

0.5
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Micro and Starbucks is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Micro Focus Intl and Starbucks Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Starbucks Corp and Micro Focus 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 Micro Focus Intl are associated (or correlated) with Starbucks Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Starbucks Corp has no effect on the direction of Micro Focus i.e., Micro Focus and Starbucks Corp go up and down completely randomly.

Pair Corralation between Micro Focus and Starbucks Corp

Given the investment horizon of 90 days Micro Focus Intl is expected to under-perform the Starbucks Corp. But the stock apears to be less risky and, when comparing its historical volatility, Micro Focus Intl is 2.09 times less risky than Starbucks Corp. The stock trades about -0.39 of its potential returns per unit of risk. The Starbucks Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  8,412  in Starbucks Corp on June 29, 2022 and sell it today you would earn a total of  173.00  from holding Starbucks Corp or generate 2.06% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Micro Focus Intl  vs.  Starbucks Corp

 Performance (%) 
       Timeline  
Micro Focus Intl 
Micro Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Micro Focus Intl are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Micro Focus displayed solid returns over the last few months and may actually be approaching a breakup point.

Micro Price Channel

Starbucks Corp 
Starbucks Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Starbucks Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Starbucks Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Starbucks Price Channel

Micro Focus and Starbucks Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Micro Focus and Starbucks Corp

The main advantage of trading using opposite Micro Focus and Starbucks Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micro Focus position performs unexpectedly, Starbucks 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 Starbucks Corp will offset losses from the drop in Starbucks Corp's long position.
Micro Focus vs. Kibush Capital Corp
The idea behind Micro Focus Intl and Starbucks 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.
Starbucks Corp vs. Kibush Capital Corp
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

Other Complementary Tools

Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Go
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Go
Fund Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Go
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Go
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Go
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Go
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Go
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Go
Focused Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Go
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Go
Price Transformation
Use Price Transformation models to analyze depth of different equity instruments across global markets
Go