Correlation Between Microsoft and INAQ Old
Can any of the company-specific risk be diversified away by investing in both Microsoft and INAQ Old 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 INAQ Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and INAQ Old, you can compare the effects of market volatilities on Microsoft and INAQ Old 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 INAQ Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and INAQ Old.
Diversification Opportunities for Microsoft and INAQ Old
Significant diversification
The 3 months correlation between Microsoft and INAQ is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and INAQ Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INAQ Old 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 INAQ Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INAQ Old has no effect on the direction of Microsoft i.e., Microsoft and INAQ Old go up and down completely randomly.
Pair Corralation between Microsoft and INAQ Old
If you would invest 950.00 in INAQ Old on November 5, 2024 and sell it today you would earn a total of 0.00 from holding INAQ Old or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 5.26% |
| Values | Daily Returns |
Microsoft vs. INAQ Old
Performance |
| Timeline |
| Microsoft |
| INAQ Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Microsoft and INAQ Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and INAQ Old
The main advantage of trading using opposite Microsoft and INAQ Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, INAQ Old 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 INAQ Old will offset losses from the drop in INAQ Old'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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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