Correlation Between Microsoft and Nan Ya
Can any of the company-specific risk be diversified away by investing in both Microsoft and Nan Ya 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 Nan Ya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Nan Ya Printed, you can compare the effects of market volatilities on Microsoft and Nan Ya 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 Nan Ya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Nan Ya.
Diversification Opportunities for Microsoft and Nan Ya
Good diversification
The 3 months correlation between Microsoft and Nan is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Nan Ya Printed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nan Ya Printed 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 Nan Ya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nan Ya Printed has no effect on the direction of Microsoft i.e., Microsoft and Nan Ya go up and down completely randomly.
Pair Corralation between Microsoft and Nan Ya
Given the investment horizon of 90 days Microsoft is expected to generate 0.6 times more return on investment than Nan Ya. However, Microsoft is 1.68 times less risky than Nan Ya. It trades about -0.05 of its potential returns per unit of risk. Nan Ya Printed is currently generating about -0.1 per unit of risk. If you would invest 43,125 in Microsoft on August 26, 2024 and sell it today you would lose (1,425) from holding Microsoft or give up 3.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.73% |
| Values | Daily Returns |
Microsoft vs. Nan Ya Printed
Performance |
| Timeline |
| Microsoft |
| Nan Ya Printed |
Microsoft and Nan Ya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Nan Ya
The main advantage of trading using opposite Microsoft and Nan Ya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Nan Ya 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 Nan Ya will offset losses from the drop in Nan Ya's long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Rapid7 Inc |
| Nan Ya vs. Novatek Microelectronics Corp | Nan Ya vs. Quanta Computer | Nan Ya vs. United Microelectronics |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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