Correlation Between Microsoft and Immofinanz
Can any of the company-specific risk be diversified away by investing in both Microsoft and Immofinanz 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 Immofinanz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Immofinanz AG, you can compare the effects of market volatilities on Microsoft and Immofinanz 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 Immofinanz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Immofinanz.
Diversification Opportunities for Microsoft and Immofinanz
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Immofinanz is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Immofinanz AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immofinanz AG 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 Immofinanz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immofinanz AG has no effect on the direction of Microsoft i.e., Microsoft and Immofinanz go up and down completely randomly.
Pair Corralation between Microsoft and Immofinanz
Given the investment horizon of 90 days Microsoft is expected to generate 0.72 times more return on investment than Immofinanz. However, Microsoft is 1.39 times less risky than Immofinanz. It trades about 0.09 of its potential returns per unit of risk. Immofinanz AG is currently generating about 0.03 per unit of risk. If you would invest 23,571 in Microsoft on September 24, 2024 and sell it today you would earn a total of 20,089 from holding Microsoft or generate 85.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.22% |
Values | Daily Returns |
Microsoft vs. Immofinanz AG
Performance |
Timeline |
Microsoft |
Immofinanz AG |
Microsoft and Immofinanz Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Microsoft and Immofinanz
The main advantage of trading using opposite Microsoft and Immofinanz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Immofinanz 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 Immofinanz will offset losses from the drop in Immofinanz's long position.Microsoft vs. BlackBerry | Microsoft vs. Global Blue Group | Microsoft vs. Aurora Mobile | Microsoft vs. Marqeta |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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