Correlation Between Microsoft and Ningbo Boway
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By analyzing existing cross correlation between Microsoft and Ningbo Boway Alloy, you can compare the effects of market volatilities on Microsoft and Ningbo Boway 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 Ningbo Boway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Ningbo Boway.
Diversification Opportunities for Microsoft and Ningbo Boway
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Ningbo is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Ningbo Boway Alloy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Boway Alloy 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 Ningbo Boway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Boway Alloy has no effect on the direction of Microsoft i.e., Microsoft and Ningbo Boway go up and down completely randomly.
Pair Corralation between Microsoft and Ningbo Boway
Given the investment horizon of 90 days Microsoft is expected to generate 1.26 times less return on investment than Ningbo Boway. But when comparing it to its historical volatility, Microsoft is 3.83 times less risky than Ningbo Boway. It trades about 0.1 of its potential returns per unit of risk. Ningbo Boway Alloy is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,661 in Ningbo Boway Alloy on September 28, 2024 and sell it today you would earn a total of 340.00 from holding Ningbo Boway Alloy or generate 20.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.39% |
| Values | Daily Returns |
Microsoft vs. Ningbo Boway Alloy
Performance |
| Timeline |
| Microsoft |
| Ningbo Boway Alloy |
Microsoft and Ningbo Boway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Ningbo Boway
The main advantage of trading using opposite Microsoft and Ningbo Boway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Ningbo Boway 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 Ningbo Boway will offset losses from the drop in Ningbo Boway's long position.| Microsoft vs. BlackBerry | Microsoft vs. Global Blue Group | Microsoft vs. Aurora Mobile | Microsoft vs. Marqeta |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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