Correlation Between Microsoft and Nantong Jiangshan
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By analyzing existing cross correlation between Microsoft and Nantong Jiangshan Agrochemical, you can compare the effects of market volatilities on Microsoft and Nantong Jiangshan 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 Nantong Jiangshan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Nantong Jiangshan.
Diversification Opportunities for Microsoft and Nantong Jiangshan
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Microsoft and Nantong is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Nantong Jiangshan Agrochemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nantong Jiangshan 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 Nantong Jiangshan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nantong Jiangshan has no effect on the direction of Microsoft i.e., Microsoft and Nantong Jiangshan go up and down completely randomly.
Pair Corralation between Microsoft and Nantong Jiangshan
Given the investment horizon of 90 days Microsoft is expected to generate 0.6 times more return on investment than Nantong Jiangshan. However, Microsoft is 1.68 times less risky than Nantong Jiangshan. It trades about 0.08 of its potential returns per unit of risk. Nantong Jiangshan Agrochemical is currently generating about -0.06 per unit of risk. If you would invest 24,601 in Microsoft on November 19, 2024 and sell it today you would earn a total of 16,242 from holding Microsoft or generate 66.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.16% |
| Values | Daily Returns |
Microsoft vs. Nantong Jiangshan Agrochemical
Performance |
| Timeline |
| Microsoft |
| Nantong Jiangshan |
Microsoft and Nantong Jiangshan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Nantong Jiangshan
The main advantage of trading using opposite Microsoft and Nantong Jiangshan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Nantong Jiangshan 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 Nantong Jiangshan will offset losses from the drop in Nantong Jiangshan's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Adobe Systems Incorporated | Microsoft vs. Crowdstrike Holdings |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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