Correlation Between Microsoft and Bank Nationalnobu
Can any of the company-specific risk be diversified away by investing in both Microsoft and Bank Nationalnobu 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 Bank Nationalnobu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Bank Nationalnobu Tbk, you can compare the effects of market volatilities on Microsoft and Bank Nationalnobu 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 Bank Nationalnobu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Bank Nationalnobu.
Diversification Opportunities for Microsoft and Bank Nationalnobu
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Bank is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Bank Nationalnobu Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Nationalnobu Tbk 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 Bank Nationalnobu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Nationalnobu Tbk has no effect on the direction of Microsoft i.e., Microsoft and Bank Nationalnobu go up and down completely randomly.
Pair Corralation between Microsoft and Bank Nationalnobu
Given the investment horizon of 90 days Microsoft is expected to under-perform the Bank Nationalnobu. But the stock apears to be less risky and, when comparing its historical volatility, Microsoft is 1.03 times less risky than Bank Nationalnobu. The stock trades about -0.04 of its potential returns per unit of risk. The Bank Nationalnobu Tbk is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 64,500 in Bank Nationalnobu Tbk on August 30, 2024 and sell it today you would earn a total of 1,500 from holding Bank Nationalnobu Tbk or generate 2.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Bank Nationalnobu Tbk
Performance |
| Timeline |
| Microsoft |
| Bank Nationalnobu Tbk |
Microsoft and Bank Nationalnobu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Bank Nationalnobu
The main advantage of trading using opposite Microsoft and Bank Nationalnobu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Bank Nationalnobu 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 Bank Nationalnobu will offset losses from the drop in Bank Nationalnobu's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Bank Nationalnobu vs. Trinitan Metals and | Bank Nationalnobu vs. Metrodata Electronics Tbk | Bank Nationalnobu vs. Alumindo Light Metal | Bank Nationalnobu vs. Lion Metal Works |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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