Correlation Between MicroStrategy Incorporated and NXP Semiconductors

Can any of the company-specific risk be diversified away by investing in both MicroStrategy Incorporated and NXP Semiconductors 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 MicroStrategy Incorporated and NXP Semiconductors into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MicroStrategy Incorporated and NXP Semiconductors NV, you can compare the effects of market volatilities on MicroStrategy Incorporated and NXP Semiconductors 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 MicroStrategy Incorporated with a short position of NXP Semiconductors. Check out your portfolio center. Please also check ongoing floating volatility patterns of MicroStrategy Incorporated and NXP Semiconductors.

Diversification Opportunities for MicroStrategy Incorporated and NXP Semiconductors

0.93

Correlation Coefficient

MicroStrategy Incorporated  NXP Semiconductors

Almost no diversification

The 3 months correlation between MicroStrategy and NXP is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding MicroStrategy Incorporated and NXP Semiconductors NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NXP Semiconductors and MicroStrategy Incorporated 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 MicroStrategy Incorporated are associated (or correlated) with NXP Semiconductors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NXP Semiconductors has no effect on the direction of MicroStrategy Incorporated i.e., MicroStrategy Incorporated and NXP Semiconductors go up and down completely randomly.

Pair Corralation between MicroStrategy Incorporated and NXP Semiconductors

Given the investment horizon of 90 days MicroStrategy Incorporated is expected to under-perform the NXP Semiconductors. In addition to that, MicroStrategy Incorporated is 1.83 times more volatile than NXP Semiconductors NV. It trades about -0.27 of its total potential returns per unit of risk. NXP Semiconductors NV is currently generating about -0.15 per unit of volatility. If you would invest  23,558  in NXP Semiconductors NV on August 24, 2025 and sell it today you would lose (4,423) from holding NXP Semiconductors NV or give up 18.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

MicroStrategy Incorporated  vs.  NXP Semiconductors NV

MicroStrategy Incorporated

Risk-Adjusted Performance

Weakest

Over the last 90 days MicroStrategy Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in December 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

NXP Semiconductors

Risk-Adjusted Performance

Weakest

Over the last 90 days NXP Semiconductors NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with MicroStrategy Incorporated and NXP Semiconductors

The main advantage of trading using opposite MicroStrategy Incorporated and NXP Semiconductors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MicroStrategy Incorporated position performs unexpectedly, NXP Semiconductors 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 NXP Semiconductors will offset losses from the drop in NXP Semiconductors' long position.

The idea behind MicroStrategy Incorporated and NXP Semiconductors NV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.