Correlation Between Microsoft and Tng Investment
Can any of the company-specific risk be diversified away by investing in both Microsoft and Tng Investment 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 Tng Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Tng Investment And, you can compare the effects of market volatilities on Microsoft and Tng Investment 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 Tng Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Tng Investment.
Diversification Opportunities for Microsoft and Tng Investment
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Tng is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Tng Investment And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tng Investment And 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 Tng Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tng Investment And has no effect on the direction of Microsoft i.e., Microsoft and Tng Investment go up and down completely randomly.
Pair Corralation between Microsoft and Tng Investment
Given the investment horizon of 90 days Microsoft is expected to generate 1.52 times less return on investment than Tng Investment. But when comparing it to its historical volatility, Microsoft is 1.79 times less risky than Tng Investment. It trades about 0.07 of its potential returns per unit of risk. Tng Investment And is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,534,184 in Tng Investment And on August 29, 2024 and sell it today you would earn a total of 895,816 from holding Tng Investment And or generate 58.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Tng Investment And
Performance |
| Timeline |
| Microsoft |
| Tng Investment And |
Microsoft and Tng Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Tng Investment
The main advantage of trading using opposite Microsoft and Tng Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Tng Investment 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 Tng Investment will offset losses from the drop in Tng Investment's 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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