Correlation Between Microsoft and Next Mediaworks
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By analyzing existing cross correlation between Microsoft and Next Mediaworks Limited, you can compare the effects of market volatilities on Microsoft and Next Mediaworks 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 Next Mediaworks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Next Mediaworks.
Diversification Opportunities for Microsoft and Next Mediaworks
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Microsoft and Next is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Next Mediaworks Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Mediaworks 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 Next Mediaworks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Mediaworks has no effect on the direction of Microsoft i.e., Microsoft and Next Mediaworks go up and down completely randomly.
Pair Corralation between Microsoft and Next Mediaworks
Given the investment horizon of 90 days Microsoft is expected to generate 11.98 times less return on investment than Next Mediaworks. But when comparing it to its historical volatility, Microsoft is 3.39 times less risky than Next Mediaworks. It trades about 0.03 of its potential returns per unit of risk. Next Mediaworks Limited is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 690.00 in Next Mediaworks Limited on August 29, 2024 and sell it today you would earn a total of 356.00 from holding Next Mediaworks Limited or generate 51.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.4% |
| Values | Daily Returns |
Microsoft vs. Next Mediaworks Limited
Performance |
| Timeline |
| Microsoft |
| Next Mediaworks |
Microsoft and Next Mediaworks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Next Mediaworks
The main advantage of trading using opposite Microsoft and Next Mediaworks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Next Mediaworks 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 Next Mediaworks will offset losses from the drop in Next Mediaworks' long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Paysafe |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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