Correlation Between Microsoft and Hainan HNA
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By analyzing existing cross correlation between Microsoft and Hainan HNA Infrastructure, you can compare the effects of market volatilities on Microsoft and Hainan HNA 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 Hainan HNA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Hainan HNA.
Diversification Opportunities for Microsoft and Hainan HNA
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microsoft and Hainan is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Hainan HNA Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan HNA Infrastructure 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 Hainan HNA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hainan HNA Infrastructure has no effect on the direction of Microsoft i.e., Microsoft and Hainan HNA go up and down completely randomly.
Pair Corralation between Microsoft and Hainan HNA
Given the investment horizon of 90 days Microsoft is expected to generate 0.8 times more return on investment than Hainan HNA. However, Microsoft is 1.24 times less risky than Hainan HNA. It trades about 0.08 of its potential returns per unit of risk. Hainan HNA Infrastructure is currently generating about -0.01 per unit of risk. If you would invest 24,616 in Microsoft on August 24, 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 Against |
| Strength | Insignificant |
| Accuracy | 96.17% |
| Values | Daily Returns |
Microsoft vs. Hainan HNA Infrastructure
Performance |
| Timeline |
| Microsoft |
| Hainan HNA Infrastructure |
Microsoft and Hainan HNA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Hainan HNA
The main advantage of trading using opposite Microsoft and Hainan HNA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Hainan HNA 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 Hainan HNA will offset losses from the drop in Hainan HNA's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Hainan HNA vs. New Hope Dairy | Hainan HNA vs. Suzhou Weizhixiang Food | Hainan HNA vs. Namchow Food Group | Hainan HNA vs. Suzhou Mingzhi Technology |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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