Correlation Between Microsoft and National Silicon
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By analyzing existing cross correlation between Microsoft and National Silicon Industry, you can compare the effects of market volatilities on Microsoft and National Silicon 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 National Silicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and National Silicon.
Diversification Opportunities for Microsoft and National Silicon
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and National is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and National Silicon Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Silicon Industry 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 National Silicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Silicon Industry has no effect on the direction of Microsoft i.e., Microsoft and National Silicon go up and down completely randomly.
Pair Corralation between Microsoft and National Silicon
Given the investment horizon of 90 days Microsoft is expected to generate 0.45 times more return on investment than National Silicon. However, Microsoft is 2.21 times less risky than National Silicon. It trades about 0.07 of its potential returns per unit of risk. National Silicon Industry is currently generating about 0.01 per unit of risk. If you would invest 30,443 in Microsoft on August 30, 2024 and sell it today you would earn a total of 11,856 from holding Microsoft or generate 38.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.45% |
| Values | Daily Returns |
Microsoft vs. National Silicon Industry
Performance |
| Timeline |
| Microsoft |
| National Silicon Industry |
Microsoft and National Silicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and National Silicon
The main advantage of trading using opposite Microsoft and National Silicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, National Silicon 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 National Silicon will offset losses from the drop in National Silicon's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| National Silicon vs. China State Construction | National Silicon vs. Huafa Industrial Co | National Silicon vs. China International Capital | National Silicon vs. Kweichow Moutai Co |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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