Correlation Between Microsoft and Nok Airlines
Can any of the company-specific risk be diversified away by investing in both Microsoft and Nok Airlines 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 Nok Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Nok Airlines Public, you can compare the effects of market volatilities on Microsoft and Nok Airlines 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 Nok Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Nok Airlines.
Diversification Opportunities for Microsoft and Nok Airlines
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Microsoft and Nok is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Nok Airlines Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nok Airlines Public 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 Nok Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nok Airlines Public has no effect on the direction of Microsoft i.e., Microsoft and Nok Airlines go up and down completely randomly.
Pair Corralation between Microsoft and Nok Airlines
If you would invest 40,862 in Microsoft on August 31, 2024 and sell it today you would earn a total of 1,437 from holding Microsoft or generate 3.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Nok Airlines Public
Performance |
| Timeline |
| Microsoft |
| Nok Airlines Public |
Microsoft and Nok Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Nok Airlines
The main advantage of trading using opposite Microsoft and Nok Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Nok Airlines 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 Nok Airlines will offset losses from the drop in Nok Airlines' long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Nok Airlines vs. Copa Holdings SA | Nok Airlines vs. United Airlines Holdings | Nok Airlines vs. Delta Air Lines | Nok Airlines vs. SkyWest |
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 CEOs Directory module to screen CEOs from public companies around the world.
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