Correlation Between Microsoft and Knightswan Acquisition
Can any of the company-specific risk be diversified away by investing in both Microsoft and Knightswan Acquisition 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 Knightswan Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Knightswan Acquisition Corp, you can compare the effects of market volatilities on Microsoft and Knightswan Acquisition 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 Knightswan Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Knightswan Acquisition.
Diversification Opportunities for Microsoft and Knightswan Acquisition
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microsoft and Knightswan is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Knightswan Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knightswan 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 Knightswan Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knightswan Acquisition has no effect on the direction of Microsoft i.e., Microsoft and Knightswan Acquisition go up and down completely randomly.
Pair Corralation between Microsoft and Knightswan Acquisition
If you would invest 36,988 in Microsoft on September 12, 2024 and sell it today you would earn a total of 7,912 from holding Microsoft or generate 21.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.4% |
| Values | Daily Returns |
Microsoft vs. Knightswan Acquisition Corp
Performance |
| Timeline |
| Microsoft |
| Knightswan Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Microsoft and Knightswan Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Knightswan Acquisition
The main advantage of trading using opposite Microsoft and Knightswan Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Knightswan Acquisition 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 Knightswan Acquisition will offset losses from the drop in Knightswan Acquisition's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Knightswan Acquisition vs. Everest Consolidator Acquisition | Knightswan Acquisition vs. PowerUp Acquisition Corp |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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