Correlation Between Microsoft and Nanhua Bio
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By analyzing existing cross correlation between Microsoft and Nanhua Bio Medicine, you can compare the effects of market volatilities on Microsoft and Nanhua Bio 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 Nanhua Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Nanhua Bio.
Diversification Opportunities for Microsoft and Nanhua Bio
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Microsoft and Nanhua is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Nanhua Bio Medicine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanhua Bio Medicine 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 Nanhua Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanhua Bio Medicine has no effect on the direction of Microsoft i.e., Microsoft and Nanhua Bio go up and down completely randomly.
Pair Corralation between Microsoft and Nanhua Bio
Given the investment horizon of 90 days Microsoft is expected to generate 0.43 times more return on investment than Nanhua Bio. However, Microsoft is 2.34 times less risky than Nanhua Bio. It trades about 0.08 of its potential returns per unit of risk. Nanhua Bio Medicine is currently generating about 0.0 per unit of risk. If you would invest 24,616 in Microsoft on August 26, 2024 and sell it today you would earn a total of 17,084 from holding Microsoft or generate 69.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.18% |
| Values | Daily Returns |
Microsoft vs. Nanhua Bio Medicine
Performance |
| Timeline |
| Microsoft |
| Nanhua Bio Medicine |
Microsoft and Nanhua Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Nanhua Bio
The main advantage of trading using opposite Microsoft and Nanhua Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Nanhua Bio 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 Nanhua Bio will offset losses from the drop in Nanhua Bio's long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Rapid7 Inc |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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