Correlation Between Microsoft and JV SPAC
Can any of the company-specific risk be diversified away by investing in both Microsoft and JV SPAC 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 JV SPAC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and JV SPAC Acquisition, you can compare the effects of market volatilities on Microsoft and JV SPAC 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 JV SPAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and JV SPAC.
Diversification Opportunities for Microsoft and JV SPAC
Weak diversification
The 3 months correlation between Microsoft and JVSA is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and JV SPAC Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JV SPAC Acquisition 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 JV SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JV SPAC Acquisition has no effect on the direction of Microsoft i.e., Microsoft and JV SPAC go up and down completely randomly.
Pair Corralation between Microsoft and JV SPAC
Given the investment horizon of 90 days Microsoft is expected to generate 32.81 times more return on investment than JV SPAC. However, Microsoft is 32.81 times more volatile than JV SPAC Acquisition. It trades about 0.15 of its potential returns per unit of risk. JV SPAC Acquisition is currently generating about 0.4 per unit of risk. If you would invest 40,955 in Microsoft on September 2, 2024 and sell it today you would earn a total of 1,391 from holding Microsoft or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. JV SPAC Acquisition
Performance |
| Timeline |
| Microsoft |
| JV SPAC Acquisition |
Microsoft and JV SPAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and JV SPAC
The main advantage of trading using opposite Microsoft and JV SPAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, JV SPAC 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 JV SPAC will offset losses from the drop in JV SPAC's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| JV SPAC vs. PennantPark Floating Rate | JV SPAC vs. Zane Interactive Publishing | JV SPAC vs. Nomura Holdings ADR | JV SPAC vs. Aldel Financial II |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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