Correlation Between Microsoft and NH SPAC
Can any of the company-specific risk be diversified away by investing in both Microsoft and NH SPAC 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 NH SPAC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and NH SPAC 8, you can compare the effects of market volatilities on Microsoft and NH SPAC 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 NH SPAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and NH SPAC.
Diversification Opportunities for Microsoft and NH SPAC
Good diversification
The 3 months correlation between Microsoft and 218410 is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and NH SPAC 8 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH SPAC 8 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 NH SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH SPAC 8 has no effect on the direction of Microsoft i.e., Microsoft and NH SPAC go up and down completely randomly.
Pair Corralation between Microsoft and NH SPAC
Given the investment horizon of 90 days Microsoft is expected to generate 0.5 times more return on investment than NH SPAC. However, Microsoft is 2.01 times less risky than NH SPAC. It trades about 0.09 of its potential returns per unit of risk. NH SPAC 8 is currently generating about -0.03 per unit of risk. If you would invest 23,466 in Microsoft on September 3, 2024 and sell it today you would earn a total of 18,880 from holding Microsoft or generate 80.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.26% |
| Values | Daily Returns |
Microsoft vs. NH SPAC 8
Performance |
| Timeline |
| Microsoft |
| NH SPAC 8 |
Microsoft and NH SPAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and NH SPAC
The main advantage of trading using opposite Microsoft and NH SPAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, NH SPAC 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 NH SPAC will offset losses from the drop in NH SPAC's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| NH SPAC vs. Samsung Electronics Co | NH SPAC vs. Samsung Electronics Co | NH SPAC vs. LG Energy Solution | NH SPAC vs. SK Hynix |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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