Correlation Between Microsoft and Nafpaktos Textile
Can any of the company-specific risk be diversified away by investing in both Microsoft and Nafpaktos Textile 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 Nafpaktos Textile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Nafpaktos Textile Industry, you can compare the effects of market volatilities on Microsoft and Nafpaktos Textile 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 Nafpaktos Textile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Nafpaktos Textile.
Diversification Opportunities for Microsoft and Nafpaktos Textile
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Microsoft and Nafpaktos is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Nafpaktos Textile Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nafpaktos Textile 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 Nafpaktos Textile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nafpaktos Textile has no effect on the direction of Microsoft i.e., Microsoft and Nafpaktos Textile go up and down completely randomly.
Pair Corralation between Microsoft and Nafpaktos Textile
Given the investment horizon of 90 days Microsoft is expected to generate 0.5 times more return on investment than Nafpaktos Textile. However, Microsoft is 2.02 times less risky than Nafpaktos Textile. It trades about 0.0 of its potential returns per unit of risk. Nafpaktos Textile Industry is currently generating about -0.04 per unit of risk. If you would invest 41,213 in Microsoft on December 7, 2024 and sell it today you would lose (1,524) from holding Microsoft or give up 3.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.57% |
| Values | Daily Returns |
Microsoft vs. Nafpaktos Textile Industry
Performance |
| Timeline |
| Microsoft |
| Nafpaktos Textile |
Microsoft and Nafpaktos Textile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Nafpaktos Textile
The main advantage of trading using opposite Microsoft and Nafpaktos Textile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Nafpaktos Textile 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 Nafpaktos Textile will offset losses from the drop in Nafpaktos Textile's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Adobe Systems Incorporated | Microsoft vs. Crowdstrike Holdings |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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