Correlation Between Microsoft Corp and Blue Apron

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

Diversification Opportunities for Microsoft Corp and Blue Apron

0.46
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Microsoft and Blue Apron is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft Corp and Blue Apron Holdings in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Blue Apron Holdings and Microsoft Corp 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 Corp are associated (or correlated) with Blue Apron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Apron Holdings has no effect on the direction of Microsoft Corp i.e., Microsoft Corp and Blue Apron go up and down completely randomly.

Pair Corralation between Microsoft Corp and Blue Apron

Given the investment horizon of 90 days Microsoft Corp is expected to generate 0.26 times more return on investment than Blue Apron. However, Microsoft Corp is 3.89 times less risky than Blue Apron. It trades about 0.05 of its potential returns per unit of risk. Blue Apron Holdings is currently generating about 0.0 per unit of risk. If you would invest  18,002  in Microsoft Corp on February 18, 2022 and sell it today you would earn a total of  7,312  from holding Microsoft Corp or generate 40.62% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Microsoft Corp  vs.  Blue Apron Holdings

 Performance (%) 
      Timeline 
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 latest weak performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Microsoft Price Channel

Blue Apron Holdings 
Blue Apron Performance
0 of 100
Over the last 90 days Blue Apron Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in June 2022. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Blue Apron Price Channel

Microsoft Corp and Blue Apron Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Microsoft Corp and Blue Apron

The main advantage of trading using opposite Microsoft Corp and Blue Apron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft Corp position performs unexpectedly, Blue Apron 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 Blue Apron will offset losses from the drop in Blue Apron's long position.

Microsoft Corp

Pair trading matchups for Microsoft Corp

The idea behind Microsoft Corp and Blue Apron Holdings 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

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