Correlation Between Microsoft and ManTech International
Can any of the company-specific risk be diversified away by investing in both Microsoft and ManTech International 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 ManTech International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and ManTech International, you can compare the effects of market volatilities on Microsoft and ManTech International 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 ManTech International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and ManTech International.
Diversification Opportunities for Microsoft and ManTech International
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Microsoft and ManTech is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and ManTech International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ManTech International 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 ManTech International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ManTech International has no effect on the direction of Microsoft i.e., Microsoft and ManTech International go up and down completely randomly.
Pair Corralation between Microsoft and ManTech International
Given the investment horizon of 90 days Microsoft is expected to generate 1.8 times less return on investment than ManTech International. In addition to that, Microsoft is 1.11 times more volatile than ManTech International. It trades about 0.06 of its total potential returns per unit of risk. ManTech International is currently generating about 0.11 per unit of volatility. If you would invest 8,234 in ManTech International on January 26, 2024 and sell it today you would earn a total of 1,364 from holding ManTech International or generate 16.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 18.42% |
| Values | Daily Returns |
Microsoft vs. ManTech International
Performance |
| Timeline |
| Microsoft |
| ManTech International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Microsoft and ManTech International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and ManTech International
The main advantage of trading using opposite Microsoft and ManTech International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, ManTech International 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 ManTech International will offset losses from the drop in ManTech International's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| ManTech International vs. Uranium Energy Corp | ManTech International vs. US Silica Holdings | ManTech International vs. Eldorado Gold Corp | ManTech International vs. Arbor Metals Corp |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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