Correlation Between Microsoft and 66977WAP4
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By analyzing existing cross correlation between Microsoft and Nova Chemicals 5, you can compare the effects of market volatilities on Microsoft and 66977WAP4 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 66977WAP4. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and 66977WAP4.
Diversification Opportunities for Microsoft and 66977WAP4
Good diversification
The 3 months correlation between Microsoft and 66977WAP4 is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Nova Chemicals 5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova Chemicals 5 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 66977WAP4. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova Chemicals 5 has no effect on the direction of Microsoft i.e., Microsoft and 66977WAP4 go up and down completely randomly.
Pair Corralation between Microsoft and 66977WAP4
Given the investment horizon of 90 days Microsoft is expected to generate 23.28 times less return on investment than 66977WAP4. But when comparing it to its historical volatility, Microsoft is 38.42 times less risky than 66977WAP4. It trades about 0.08 of its potential returns per unit of risk. Nova Chemicals 5 is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 9,605 in Nova Chemicals 5 on September 2, 2024 and sell it today you would earn a total of 295.00 from holding Nova Chemicals 5 or generate 3.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 66.53% |
| Values | Daily Returns |
Microsoft vs. Nova Chemicals 5
Performance |
| Timeline |
| Microsoft |
| Nova Chemicals 5 |
Microsoft and 66977WAP4 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and 66977WAP4
The main advantage of trading using opposite Microsoft and 66977WAP4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, 66977WAP4 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 66977WAP4 will offset losses from the drop in 66977WAP4's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| 66977WAP4 vs. AEP TEX INC | 66977WAP4 vs. US BANK NATIONAL | 66977WAP4 vs. Bank of America | 66977WAP4 vs. GE Aerospace |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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