Correlation Between Microsoft and Manning Napier
Can any of the company-specific risk be diversified away by investing in both Microsoft and Manning Napier 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 Manning Napier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Manning Napier Pro Blend, you can compare the effects of market volatilities on Microsoft and Manning Napier 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 Manning Napier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Manning Napier.
Diversification Opportunities for Microsoft and Manning Napier
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Microsoft and Manning is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Manning Napier Pro Blend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manning Napier Pro 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 Manning Napier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manning Napier Pro has no effect on the direction of Microsoft i.e., Microsoft and Manning Napier go up and down completely randomly.
Pair Corralation between Microsoft and Manning Napier
Given the investment horizon of 90 days Microsoft is expected to under-perform the Manning Napier. In addition to that, Microsoft is 3.84 times more volatile than Manning Napier Pro Blend. It trades about -0.06 of its total potential returns per unit of risk. Manning Napier Pro Blend is currently generating about -0.02 per unit of volatility. If you would invest 2,056 in Manning Napier Pro Blend on August 26, 2024 and sell it today you would lose (4.00) from holding Manning Napier Pro Blend or give up 0.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Manning Napier Pro Blend
Performance |
| Timeline |
| Microsoft |
| Manning Napier Pro |
Microsoft and Manning Napier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Manning Napier
The main advantage of trading using opposite Microsoft and Manning Napier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Manning Napier 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 Manning Napier will offset losses from the drop in Manning Napier's long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Rapid7 Inc |
| Manning Napier vs. Pro Blend Moderate Term | Manning Napier vs. Pro Blend Maximum Term | Manning Napier vs. Pro Blend Servative Term | Manning Napier vs. Madison Mid Cap |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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